3 investments that are better than Bitcoin
Bitcoin (CRYPTO: BTC) made waves after You’re here announced that he was buying $ 1.5 billion worth of cryptocurrency.
Although the price of Bitcoin has recently skyrocketed, reaching a record high of around $ 45,000 on February 10, it is an incredibly risky investment. On more than one occasion, the price of Bitcoin has fallen, at one point losing nearly 80% of its value. In fact, between January 1 and January 26 of this year, Bitcoin fell more than 25% before rebounding.
While it is possible to make a lot of money by investing in this cryptocurrency, there are better options. These investments carry less risk, but it is still possible to generate above-average returns.
1. Growth ETF
Exchange traded funds (AND F) are groups of securities grouped together in a single investment. Growth ETFs contain stocks that have the potential to grow rapidly. They are designed to beat the market, which makes them a good choice if you are looking for above average returns.
Because high growth companies can be volatile, growth ETFs are a bit riskier than some other types of investments. However, one of the main advantages of ETFs is that you invest in multiple stocks at the same time. This limits your risk because your portfolio will not be significantly affected if a few stocks in the fund underperform.
2. Dividend shares
Dividend stocks are investments that basically pay you for owning them. When a company has remaining profits at the end of the year, it sometimes pays some of that money back to shareholders as a dividend.
The amount you can earn in dividend payouts depends on the individual stock and the number of stocks you own. While a higher dividend payout is usually ideal, it’s important to have the big picture when choosing stocks. If a particular equity has a high value dividend yield but the company is in trouble, it is probably not a wise investment.
Many dividend paying stocks are established companies with a long track record of success, making them less volatile than smaller or younger companies. While you might not see as much growth with these stocks, you can earn decent passive income from dividends.
3. Small cap stocks
Small cap stocks are companies with a smaller market cap – typically $ 300-2 billion. These stocks attract many investors because of their potential for growth in large cap stocks.
All giant companies had to start somewhere, and it’s every investor’s dream to invest in the next Amazon, Apple, or You’re here. By investing in small cap stocks, you are buying companies that could one day be worth hundreds of billions of dollars.
Small cap stocks tend to be riskier than large cap stocks, simply because small companies tend to be more volatile. But if you do your research, invest in solid companies, and hold your investments for the long term, you stand a better chance of getting big returns.
No matter where you choose to invest, it’s important to weigh risk against return. You can make a lot of money with trendy investments like Bitcoin, but they come with huge risk. By focusing on less risky investments, you can protect your money while maximizing your rewards.
This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.