Are you currently sitting on $1,000 and not too sure what to do with it? Well, by letting it sit in a basic bank account, you’ll be lucky to make more than a percent in interest these days. On the contrary, by making some smart investments, you have the chance to grow your money over the course of time.
However, with so many investment opportunities available, it can be difficult knowing where to place your money. As such, we’ve listed 15 smart ways to invest $1,000 in 2019. Whether its bonds, crypto, ETFs, commodities, or property, we’ve got something covered for all risk levels.
5 things to keep in mind before investing your $1,000
Before you invest your $1,000, it is important that you have a full understanding of how each investment works, how much you hope to make, as well as the underlying risks. We’ve presented five things that you should keep in mind before investing your $1,000.
1. How long are you willing to wait to see results?
Before you invest your $1,000, you need to think about how long you are prepared to hold on to your investment. For example, if you invest in bonds with a 5-year term, then you should know that you won’t be able to touch the funds until the bonds mature (after 5-years). If you can only afford to lock your money up for a year, then you might need to consider a short-term investment (such as crypto or peer-to-peer lending).
2. How much risk are you willing to take?
Each investment will have its own risk-vs-reward levels to consider. The higher the risk, the higher the returns should be. If you only want to invest in a super low-risk asset, then you might want to stick with bonds (such as U.S. Treasuries). Alternatively, if you want to invest in a high-risk asset, then you’re best suited for crypto or penny stocks.
3. How much money would you be happy to walk away with?
If you’re going to risk your $1,000, you need to assess how much money you would be happy making. If you invest in bonds that pay just 2%, then you need to evaluate whether it’s worth the investment. However, if you do want to make bigger returns, then be sure that you understand the higher risks attached to the investment.
4. Do you know enough to be able to invest?
Knowledge is everything in the investment space. While we strive to provide you with the groundwork to begin your investment journey, you still need to perform your own research. This is also the case for robo-advisor platforms, as you need to ensure that the underlying technology is advanced enough to outperform the market.
5. Are you ready to deal with the emotional highs and lows of investing?
Unless you are investing in fixed-rate assets such as bonds or peer-to-peer lending, then you need to be emotionally prepared for the ups and downs of the financial markets. For example, stocks and shares will always experience highs and lows, so you need to accept that some trades might not go in your favor. Some traders are not able to handle losses, but this is something that most of us will experience at some point in our investment journey.