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Which Type of Investment Will Earn You the Most Money?
Stocks vs. Bonds, Mutual Funds, ETFs, Real Estate, and Robo-Advisors.
New investors who are considering buying stocks often wonder, “Should I invest in stocks? Or something else instead?”
And investors who already know they want to invest in stocks often wonder, “Should I buy my own stocks? Or just buy a mutual fund or ETF and let someone else do the stock picking?”
These are both great questions.
Based on my experience, the best investment choice for you depends on five things:
- What type of returns do you want to strive for?
- What is your risk tolerance?
- Which type of investing best fits your personal strengths and interests?
- How much time and energy will you dedicate to investing going forward?
- How much money do you have to invest?
Before I share more on which type of investment might be best for you, let’s cover a quick overview of each, including their pros and cons.
Just a note, most of the pros and cons below are relative to buying stocks. For example, when I say a con of real estate is that it requires more money to invest, I mean as compared to buying stocks.
Why Invest in Stocks?
Investing in stocks involves buying shares of ownership in publicly-traded companies.
Investing in Stocks: Pros
- Easily diversify. It’s easy to diversify stocks by buying different company sizes, types, countries, sectors, etc.
- Own different business types. Investing in stocks allows you to own many different business types in a liquid way. For example, buying Real Estate Investment Trusts (REITs) allows you to invest in real estate without actually buying physical properties while buying mining stocks allows you to invest in precious metals without actually buying physical gold or silver.
- Superb long-term returns. Over a period of 10–15 years, stocks have a very high likelihood of making a profit (assuming past trends continue, which is never a guarantee). They have a…
