Investment Opportunities in 2024
Investment opportunities are different ways to put your money to work, and they can include any number of things, such as buying assets and waiting for them to appreciate, or investing in real estate or a business opportunity.
There are varying degrees of risks and potential rewards with each option, but if you’re looking to put your money to work this year, you may want to consider a range of ideas.
Every idea has to be vetted, of course, and it’s important to do your due diligence before investing. Only you can decide which opportunities make sense, given your goals and long term plans.
Key Points
• Investment opportunities include buying assets, investing in real estate, or investing in a business opportunity.
• Each opportunity comes with varying degrees of risk and potential rewards.
• Examples of investment opportunities include bonds, real estate or REITs, ETFs and passive investing, automated investing, and investing in startups.
• Buying precious metals like gold and silver are also potential investment opportunities.
• Investors should do their due diligence and consider their goals and long-term plans before investing.
What Is an Investment Opportunity?
An investment opportunity is exactly what it sounds like: It’s an opportunity, but not a guarantee, that you can put your money into a stock, a mutual fund, a new business, a type of cryptocurrency, that may offer the potential for growth.
While there are countless options for investors, investing typically involves using a brokerage account or investing platform to buy securities. There is a wide range of financial products on the market, and a good percentage of them can be purchased using a brokerage account.
Investments can be volatile, or at least subject to change. Virtually all investments rise and fall in value. Some are more reactive to economic issues or global politics. For that reason, it’s often useful for investors to evaluate the opportunities that may be trending in a certain year, bearing in mind all the relevant risks and investment costs.
6 Investment Opportunities to Potentially Build Wealth
1. Bonds and Bond Funds
One common conservative investment strategy is to seek a small-but-safe return from bonds.
Governments, municipalities, and companies issue bonds to investors who lend them money for a set period of time. In exchange, the issuer pays interest over the life of the loan, and returns the principal when the bond “matures.” Individuals can buy them on bond markets or on exchanges.
Upon maturity, the bond-holder gets their original investment (known as the principal) back in full. In other words, a bond is a loan, with the investor loaning another party money, in exchange for interest payments for a set period of time.
Different Types of Bonds
There are many different types of bonds. The most common, and generally considered to be the lowest-risk category of bonds might be the U.S. Treasury bonds, typically called treasuries.
The Treasury regularly auctions off both short-term and long-term Treasury bonds and notes. These bonds are, generally, thought to be one of the safest investments on the market, as they’re guaranteed by the U.S. government. The only way for investors to lose their entire investment would be for the U.S. government to become insolvent, which has never occurred.
Governments are not the only entities that issue bonds. Corporations can also raise money by offering corporate bonds. These types of bonds tend to be riskier, but they often pay a higher rate of interest (known as the yield).
A bond’s price is the inverse of its yield. This means that as the price of a bond falls, its yield goes up (and vice versa).
For new investors, one of the simpler ways to gain exposure to bonds might be through various exchange-traded funds (ETFs) that are invested in bonds.
Other ETFs may include some bonds as part of a broader bundle of securities.
💡 Recommended: What Is Capital Appreciation?
2. Real Estate or REITs
Real estate is the largest asset class in the world, with a market cap well into the hundreds of trillions of dollars.
When thinking about investing in real estate, residential properties may be one of the first things that comes to mind, such as buying a single family home. But owning property, like a home, can come with an array of responsibilities, liabilities, and expenses. In that way, it’s different from owning a stock or bond.
Annual property taxes, maintenance and upkeep, and paying back mortgage interest can add to the cost of treating a home as an investment. It’s also worth remembering that residential properties can appreciate or depreciate in value, too.
Other real-estate investment options involve owning multi-family rental properties (like apartment buildings or duplexes), commercial properties like shopping malls, or office buildings. These tend to require large initial investments, but those who own them could reap significant returns from rental income. (Naturally, few investments guarantee returns and rental demands and pricing can change over time).
For people with smaller amounts of capital, investing in physical real estate might not be a realistic or desirable option. Fortunately for these investors, some investment opportunities can provide exposure to real estate without the hassle and liability of owning physical property. One common way to do this is through Real Estate Investment Trusts, or REITs.
Like other investments, there are pros and cons of REITs, but companies can be classified as REITs if they derive at least 75% of their income from the operation, maintenance, or mortgaging of real estate. Additionally, 75% of a REITs assets must also be held in the form of real property or loans directly tied to them.
There are many different types of REITs. Some examples of the types of properties that different REITs might specialize in include:
• Residential real estate
• Data centers
• Commercial real estate
• Health care
Shares of a REIT can be purchased and held in a brokerage account, just like a stock or ETF. To buy some, it’s often as simple as looking up a specific REIT’s ticker symbol.
REITs are popular among passive-income investors, as they tend to have high dividend yields because they are required by law to pass on 90% of their amount of their income to shareholders.
Historically, REITs have often provided better returns than fixed-income assets like bonds, although REITs do tend to be higher-risk investments.
Get up to $1,000 in stock when you fund a new Active Invest account.*
Access stock trading, options, alternative investments, IRAs, and more. Get started in just a few minutes.
3. ETFs and Passive Investing
Passive investing, which refers to exchange-traded funds (ETFs), mutual funds, and other instruments that track an index and do not have an active manager, have become increasingly popular over the years.
• Weighing the merits of passive vs. active investing is an ongoing debate, with strong advocates on both sides. In recent years, assets held in passive instruments have outpaced active funds.
Passive investing tends to be lower cost compared with active investing, and over time these strategies tend to do well.
• An ETF is a security that usually tracks a specific industry or index by investing in a number of stocks or other financial instruments.
ETFs are commonly referred to as one type of passive investing, because most ETFs track an index. Some ETFs are actively managed, but most are not.
These days, there are ETFs for just about everything — no matter your investing goal, interest area, or industry you wish you invest in. Small-cap stocks, large-cap stocks, international stocks, short-term bonds, long-term bonds, corporate bonds, and more.
Some potential advantages of ETFs include lower costs and built-in diversification. Rather than having to pick and choose different stocks, investors can choose shares of a single ETF to buy, gaining some level of ownership in the fund’s underlying assets.
Thus investing in ETFs could make the process of buying into different investments easier, while potentially increasing portfolio diversification (i.e., investing in distinct types of assets in order to manage risk).
4. Automated Investing
Another form of investing involves automated portfolios called robo advisors, as well as target-date mutual funds, which are often used in retirement planning.
An Intro to Robo Advisors
Typically, a robo advisor is an online investment service that provides you with a questionnaire so you can input your preferences: e.g. your financial goals, your personal risk tolerance, and time horizon. Using these parameters, as well as investing best practices, the robo advisor employs a sophisticated algorithm to recommend a portfolio that suits your goals.
These automated portfolios are pre-set, and they can tilt toward an aggressive allocation or a conservative one, or something in between. They’re typically comprised of low-cost exchange-traded funds (ETFs). These online portfolios are designed to rebalance over time, using technology and artificial intelligence to do so.
You can use a robo investing as you would any account — for retirement, as a taxable investment account, or even for your emergency fund — and you typically invest using automatic deposits or contributions.
An Intro to Target-Date Funds
For investors who would rather “set it and forget it” than have to choose securities and manage investments over time, robo advisors could be one automated investment option. Target-date mutual funds, which are a type of mutual fund often used for retirement planning and college savings, also use technology to automate a certain asset allocation over time.
By starting out with a more aggressive allocation and slowly dialing back as years pass, the fund’s underlying portfolio may be able to deliver growth while minimizing risk. This ready-made type of fund can be appealing to those who have a big goal (like retirement or saving for college), and who don’t want the uncertainty or potential risk of managing their money on their own.
5. Gold and Silver
Investing in precious metals is another way to put your money to work.
Gold is one of the most valued commodities. For thousands of years, gold has been prized because it is scarce, difficult to obtain, has many practical uses, and does not rust, tarnish, or erode.
Silver has historically held a secondary role to gold, and today, serves more of an industrial role. For those looking to invest in physical precious metals, silver will be an affordable option.
Buying physical gold or bullion (which comes in coins and bars) isn’t the only way to invest in gold and silver. There are many related securities that allow investors to gain exposure to precious metals. There are ETFs that tend to track the prices of gold and silver, respectively. Other ETFs provide an easy vehicle for investing in gold and silver mining stocks. So, there are some different ways to invest in the field.
Companies that explore for and mine silver and gold tend to see their share prices increase in tandem with prices for the physical metals. But historically, mining stocks have outperformed simply holding metals by a factor of about 4-to-1 on average.
Gold, silver, and related securities are sometimes considered to be “safe havens,” meaning most investors perceive them as low risk. This asset class tends to perform well during times of crisis (and conversely tends to drop when the economy is going well), but past trends don’t guarantee that gold will perform one way or the other.
6. Investing in Startups
While gold is often considered to be one of the safer investments, startup investing is often considered to be one of the riskiest.
Whereas gold is a real asset almost certain to retain most or all of its value, startup investments are effectively bets on the potential of a new company, and that company might fail; in fact, there’s a good chance that it will. But it’s the high-risk, high-reward and potentially huge returns from startup investing that make it attractive to investors.
Imagine buying a little piece of a tech company when those companies were still in their infancy. When held throughout the years, an investment like that could grow enormously in value.
Angel investing and venture capital are two common ways that startups raise capital. They are both types of equity financing, whereby a business funds or expands its operations by offering investors a stake of ownership in the company. If the company does well, investors stand to profit. Because standard business loans tend to require some kind of assets as collateral (which newer companies, that might be information-based, likely do not have), raising funds in this way is sometimes the only solution startups have.
Venture capital is often associated with the tech industry, due to the large number of entrepreneurs in the industry who have turned to venture capital funds to start their businesses. This type of fund targets new companies and aims to help them grow to the next level.
Angel investing is similar to venture capital, but even riskier. An angel investor might be an individual who’s willing to help fund an otherwise struggling company.
Before running off to look for small companies to invest in, know that startup investing requires good business acumen, an eye for promising ideas, and high risk tolerance. In some cases, to, you may need to qualify as an “accredited investor” to invest in startups. Do a little homework, accordingly!
Average Rate of Return for the Investment Opportunities
Each of the aforementioned investment opportunities comes with its own set of caveats. For instance, it’s pretty much impossible to guess what types of returns you’d see from investing in ETFs without knowing the specific ETFs you’re investing in. The same holds true for cryptocurrencies, and other assets.
But for some of the previously discussed asset classes, there are some historical returns for different asset classes over the past decade, as of August 2022.
• U.S. Stock Market: 13.8%
• Bonds: 1.6%
• Real Estate: 8.8%
• Gold: 0.8%
Importance of Finding Good Investing Opportunities
There is no requirement to invest one’s money. But leaving your cash…in cash…can also be risky. No one wants their wealth eroded by inflation.
Though the global economy hadn’t seen serious inflation on a wide scale for decades until 2022, today’s rising prices effectively mean that the value of every dollar you own is diminished as time goes on.
As such, finding investment opportunities that present chances for your money to grow faster than the rate of inflation, while weighing all the appropriate risks, is a powerful incentive.
After all, some investments rise while others fall, and things change. That’s why investors need to be on the lookout for new and different opportunities.
The Takeaway
The investment opportunities described above are just some potential points of entry for investors in 2023. Investors can look to the stock, bond, or crypto markets for new ways to put their money to work — or consider active strategies vs. passive (i.e. index) strategies. They can look at commodities, like precious metals, or automated portfolios.
All these investment opportunities come with their own set of potential risks and rewards. There are no guarantees that choosing X over Y will increase your investment returns. It’s up to each investor to weigh these options, especially in light of current economic trends, such as inflation and rising rates.
SoFi Invest® helps individuals begin investing with ease, thanks to the secure, streamlined SoFi platform. When you set up an online investing account, you can choose from stocks, ETFs, and more — and you can get started with just a few dollars.
FAQ
What is the best investment opportunity right now?
The best investment opportunity at any given time will depend on the specific investor, and their individual goals, time horizon, and risk tolerance. Opportunities rise and fall over time, in reaction to economic and market trends, so investors should consider their personal preferences to determine what’s best for them.
What is the safest investment with the highest return?
Historically speaking, investing in a stock market index like the S&P 500 earns an average annual return of about 10% over time. But that’s just an average, and there are years when the market is down considerably. As such, it may not be “safe,” but over time, the market tends to bounce back.
Why are investment opportunities important?
Investing your money in the right ways can help it grow, and keep ahead of inflation. And because there are no guarantees for any one asset class or investment type, it helps to know where the opportunities lie so you can balance and/or diversify your own assets according to your own goals and time horizon.
SoFi Invest® INVESTMENTS ARE NOT FDIC INSURED • ARE NOT BANK GUARANTEED • MAY LOSE VALUE
1) Automated Investing and advisory services are provided by SoFi Wealth LLC, an SEC-registered investment adviser (“SoFi Wealth“). Brokerage services are provided to SoFi Wealth LLC by SoFi Securities LLC.
2) Active Investing and brokerage services are provided by SoFi Securities LLC, Member FINRA (www.finra.org)/SIPC(www.sipc.org). Clearing and custody of all securities are provided by APEX Clearing Corporation.
For additional disclosures related to the SoFi Invest platforms described above please visit SoFi.com/legal.
Neither the Investment Advisor Representatives of SoFi Wealth, nor the Registered Representatives of SoFi Securities are compensated for the sale of any product or service sold through any SoFi Invest platform.
Tax Information: This article provides general background information only and is not intended to serve as legal or tax advice or as a substitute for legal counsel. You should consult your own attorney and/or tax advisor if you have a question requiring legal or tax advice.
Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Exchange Traded Funds (ETFs): Investors should carefully consider the information contained in the prospectus, which contains the Fund’s investment objectives, risks, charges, expenses, and other relevant information. You may obtain a prospectus from the Fund company’s website or by email customer service at https://sofi.app.link/investchat. Please read the prospectus carefully prior to investing.
Shares of ETFs must be bought and sold at market price, which can vary significantly from the Fund’s net asset value (NAV). Investment returns are subject to market volatility and shares may be worth more or less their original value when redeemed. The diversification of an ETF will not protect against loss. An ETF may not achieve its stated investment objective. Rebalancing and other activities within the fund may be subject to tax consequences.
Claw Promotion: Customer must fund their Active Invest account with at least $50 within 30 days of opening the account. Probability of customer receiving $1,000 is 0.028%. See full terms and conditions.
SOIN0423005
