An Amateur's Guide to Investing in 2022

2022 is fraught with challenges for investors because the stock market has not recovered fully, and interest rates and inflation are on the rise. We are in a financial thunderstorm thanks to the damage that COVID-19 ended up causing on the global economy. Using effective strategies of investment and saving is the only way to survive financially. Our experts recommend investing in government I-bonds, well-diversified ETFs, and high-yield savings accounts. Investing in cryptocurrencies and commodities is also a good option for investors who can take risks because they promise higher returns.

And we’re not talking about making easy money by some stroke of luck, whilst playing some random no deposit online casino game. We’re talking proper investment that are based on market research and calculated odds.

Table of Contents

Get a High-Yield Savings Account

Although they offer no protection from inflation and give you tiny returns, high-yield savings accounts are the best place to save emergency funds. You can get your money quickly whenever you need it. Also, high-yield savings accounts are not in the least risky.

Invest in a Certificate of Deposit (CD)

Investing in Certificates of Deposit (CD) gives you higher returns than high-yield savings accounts. CDs are available at banks and give you a higher fixed rate than savings accounts. Moreover, they have FDIC insurance protection, making them ideal for investors who dislike taking risks.

But CDs take six months to five years to mature. So avoid investing in a CD if you need money shortly because breaking CDs prematurely comes with penalties. Experts recommend opening several CDs over several months or years to get different rates. In this way, you will have CDs that keep maturing at regular intervals, giving you access to liquid funds, which you can either spend or reinvest in another CD.

Hold I-Bonds

If you are interested in beating inflation, invest your money in an I-Bond because they change their rates of interest once in six months to beat inflation.

But I-bonds also have a few disadvantages. Once you invest in an I-Bond, you cannot access your money for a minimum of five years. Moreover, you can purchase I-Bonds worth only $10,000 per year, although you can invest an extra $5000 from tax refunds into I-Bonds.

Invest in Dividend Stocks

One of the best ways to beat inflation and boost returns is by purchasing dividend stocks. You will receive a dividend, which is a small portion of a company’s profits, for holding the stock. Holding dividend stocks allows you to earn money in the short-term and greater returns in the long term if the share price increases. You also have the option of reinvesting your dividends in the same stock.

Dividend stocks are risky, although experts consider them safer than growth stocks. Also, companies that pay dividends are not always wise investments. Look for dividend stocks known for regularly paying dividends and increasing them as the time passes.

Purchase Cryptocurrencies

Investor interest in cryptocurrencies is intensifying, and many investors have benefited from investing in cryptocurrencies. The price of cryptocurrencies shot up when investors showed more interest in them, leading to more investment. A few lucky investors also turned into millionaires when their coins gained new all-time highs.

But cryptocurrencies are highly volatile. In 2021, Bitcoin crashed miserably after a $50,000 rise. Also, very few coins have been able to replicate the success of Bitcoin and Ethereum. Investing in cryptocurrencies is risky because they do not enjoy the protection of FDIC insurance.

Research cryptocurrencies thoroughly and invest money you do not mind losing. You can exchange traditional currencies for cryptocurrencies on exchanges or invest in diversified crypto ETFs.