Investing your hard-earned money can be daunting, and those picking stocks know how much time and effort can go into such an endeavor. Now that I'm in the habit of putting our rainy day cash into Treasury bills (T-bills), I'm embarrassed it took so long for me to make a move. If you're in the same boat, now is the time to start looking at your options. With interest rates high, high-yield savings accounts and CDs are becoming more attractive options for short-term goals. However, over the long-term, stocks can offer the best chance to see lucrative returns. Not only can investing now save you money, but it can also set you up for significant gains during retirement.
When selecting stocks, it's important to do your research and pick stocks that you feel comfortable with. Look for stocks that have a long track record of success and a good management team. Also, look for stocks that have a low cost-basis. This will help you maximize your returns when the stock price goes up. Buying these stocks - or similar - does not guarantee that one doesn't lose money five years from now. After all, we could enter a deep recession and the stock market could crash. However, if you find a stock that you believe in and you hold onto it for the long haul, you may be in for a windfall.
Diversifying your holdings is a great way to make money. Diversification is the practice of owning different types of investments, such as stocks, bonds, mutual funds, and exchange traded funds. This way, if one of your investments performs poorly, the rest of your portfolio is still diversified and can offset any losses. The point, however, is that if you don't need the money right away, you can spread the risk out and still make a tidy profit.