Is BYD a good investment now

By Isabella Storyclaire

last updated December 20, 2024

Contributions sourced from

10 Best Investments in 2024

What to consider

As youre deciding what to invest in, youll want to consider several factors, including yourrisk tolerance, time horizon, your knowledge of investing, your financial situation and how much you can invest.

If youre looking to grow wealth, you can opt for lower-risk investments that pay a modest return, or you can take on more risk andaim for a higher return. Theres typically a trade-off in investing between risk and return. Or you can take a balanced approach, having absolutely safe money investments while still giving yourself the opportunity for long-term growth.

The best investments for 2024 allow you to do both, with varying levels of risk and return.

Risk tolerance

Risk tolerance means how much you can withstand when it comes to fluctuations in the value of your investments. Are you willing to take big risks to potentially get big returns? Or do you need a more conservative portfolio? Risk tolerance can be psychological as well as simply what your personal financial situation requires.

Conservative investors or those nearing retirement may be more comfortable allocating a larger percentage of their portfolios toless-risky investments. These are also great for people saving for both short- and intermediate-term goals. If the market becomes volatile, investments in CDs and other FDIC-protected accounts wont lose value and will be there when you need them.

Those with stronger stomachs, workersstill accumulating a retirement nest eggand those with a decade or more until they need the money are likely to fare better with riskier portfolios, as long as they diversify. A longer time horizon allows you to ride out the volatility of stocks and take advantage of their potentially higher return, for example.

Time horizon

Time horizonsimply means when you need the money. Do you need the money tomorrow or in 30 years? Are you saving for a house down payment in three years or are you looking to use your money in retirement? Time horizon determines what kinds of investments are more appropriate.

If you have a shorter time horizon, you need the money to be in the account at a specific point in time and not tied up. And that means you need safer investments such as savings accounts, CDs or maybe bonds. These fluctuate less and are generally safer.

If you have a longer time horizon, you can afford to take some risks with higher-return but more volatile investments. Your time horizon allows you to ride out the ups and downs of the market, hopefully on the way to greater long-term returns. With a longer time horizon, you can invest in stocks and stock funds and then be able to hold them for at least three to five years.

Its important that your investments are calibrated to your time horizon. You dont want to put next months rent money in the stock market and hope its there when you need it.

Your knowledge

Your knowledge of investing plays a key role in what youre investing in. Investments such as savings accounts and CDs require little knowledge, especially since your account is protected by the FDIC. But market-based products such as stocks and bonds require more knowledge.

If you want to invest in assets that require more knowledge, youll have to develop your understanding of them. For example, if you want to invest in individual stocks, you need a great deal of knowledge about the company, the industry, the products, the competitive landscape, the companys finances and much more. Many people dont have the time to invest in this process.

However, there are ways to take advantage of the market even if you have less knowledge. One of the best is an index fund, which includes a collection of stocks. If any single stock performs poorly, its likely not going to affect the index much. In effect, youre investing in the performance of dozens, if not hundreds, of stocks, which is more a wager on the markets overall performance.

So youll want to understand the limits of your knowledge as you think about investments. (Heres how to research stocks like the pros.)

How much you can invest

How much can you bring to an investment? The more money you can invest, the more likely its going to be worthwhile to investigate higher-risk, higher-return investments.

If you can bring more money, it can be worthwhile to make the time investment required to understand a specific stock or industry, because the potential rewards are so much greater than with bank products such as CDs.

Otherwise, it may not simply be worth your time. So, you may stick with bank products or turn to ETFs or mutual funds that require less time investment. These products can also work well for those who want to add to the account incrementally, as 401(k) participants do.

If you make smart decisions and invest in the right places, you can reduce the risk factor, increase the reward factor, and generate meaningful returns.Here are a few questions to consider as you get started.

Why should you invest?At a minimum, investing allows you to keep pace with cost-of-living increases created by inflation.At a maximum, the major benefit of a long-term investment strategy is the possibility of compounding interest, or growth earned on growth.
How much should you save vs. invest? As a guideline, save 20% of your income toto build an emergency fund equal to roughly three to six months worth of ordinary expenses. Invest additional funds that arent being put toward specific near-term expenses.
How do investments work?In the finance world, the market is a term used to describe the place where you can buy and sell shares of stocks, bonds, and other assets.You need to open an investment account, like a brokerage account, which you fund with cash that you can then use to buy stocks, bonds, and other investable assets.
How do you make (or lose) money? In the market, you make or lose money depending on the purchase and sale price of whatever you buy. If you buy a stock at $10 and sell it at $15, you make $5. If you buy at $15 and sell at $10, you lose $5.