Smart Ways To Invest $10,000

Do you have $10,000? Do you want to invest that $10,000 and looking for ways to invest it? If your answer is YES, Investing Port has got you covered. In this article, we would be sharing ways in which $10,000 can be invested effectively to get some returns.

Investing in Stocks

Investing in the stock market is a sure way to get returns on your investment. Another good news is that you do not always need a stockbroker to make investments for you. You could do it yourself using online stockbrokers such E*Trade, Charles Schwab and others. To effectively invest yourself, choose a suitable online broker, create a trading account, research about company(ies) you want to invest in and religiously stay informed on happenings in the stock market. Returns on investment depend on the type of stock, the time frame of investment and others. For instance, if you invest $10,000 in a company whose stocks go for $100 each, you get 100 shares of the company. Again, if the quarterly dividend yield for each stock is 5%, you get a total profit of $5 x 100 shares = $500 on your investment. And if the stock increases in price, you are now much richer than how you started.

 The type of stock investments that you can do with $10,000

• Buy regular stocks and hope they appreciate in price

• Buy stocks that pay dividends

• Buy Growth Stocks

• Buy Blue chip Stocks

• Invest in startups

Invest in Mutual Funds

Mutual fund stocks and ETF offer diversification in investment. Rather than investing in just company stock, they diversify between stocks, bonds and other short term investments. Investing in mutual stocks that mimic the S&P 500 are ideal, as they produce returns that are close as possible to the target benchmark. Popular mutual funds that mimic the S&P 500 Index include Fidelity Spartan 500 Index investors shares, Vanguard 500 Index fund investment shares, iShare Core S&P 500 ETF (IVN), Schwab S&P 500 Index Funds (SWPPX), SPDR S&P 500 ETF (SPY), and several others.

Investing in Bonds

Buying bonds in simple terms equates buying debt. Bonds can be invested in just like stocks. While investing in stocks means buying shares of a company, investing in bonds means buying the debt of a company. Bonds are also more predictable than stocks. Types of bonds include, Corporate bonds (offered by corporations), Municipal bonds (offered by cities or states to fund public projects) and  Treasury (T-bonds can be purchased directly from the government). You can calculate your returns before purchasing your bond, based on the rate and period of maturity. A risk associated with an investment in bonds is that when interest rate rise, bond prices may fall; that is, choosing to sell a bond before its maturity date, you could realize an amount less than that invested.

Invest in peer-to-peer Lending

Peer-to-peer lending is a new method of investment, usually for investors who do not want to deal with a financial institution. By joining a P2P lending platform, you become a lender and connect with borrowers. The benefit of P2P lending is the high rate of return and low risk associated. You can diversify your risks by lending money to multiple borrowers at once. $10,000 can fund many borrowers with low borrowing needs, ultimately increasing your returns and reducing your risks. Top P2P platforms are Lending Club and Prosper. They serve as an intermediary before the borrower and lender, collect payments and help with litigation.