Whether you got a sudden windfall in your tax returns or simply saved up over time, let’s say you’ve found yourself with an extra $1,000 burning a hole in your pocket. You’ve hit your savings goals for the month and you’re curious about ways to potentially grow that money over the long-term. Why not start with investing?
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Learning how to invest even a relatively modest amount like $1,000 is a great way to plant a bulb that can bloom into lasting returns. If you’re wondering about the best places to set down roots for your investments, GOBankingRates talked to several financial experts. Here are their top recommendations.
Go With Blue Chip Stocks
You could certainly do worse than putting your money into a true blue, or “blue chip” company. Blue chip companies come with a sterling reputation, based on their histories of dependable earnings and paying dividends to investors.
According to Taylor Kovar, CFP, CEO and founder of 11 Financial and CEO of The Money Couple, the stability of blue chip companies, as well as their track records of consistent performance, makes them worthy places to invest.
“Blue chip stocks are renowned for their stability, strong balance sheets, and dividend-paying capabilities, making them a good fit for long-term investors seeking capital preservation and income generation,” he said.
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If you’re looking for some examples of blue-chip stocks that seem poised to grow your green in 2024, U.S. News & World Report has a list of 10 recommended stocks. The publication’s list includes the following options:
- Brown-Forman Corp.
- Realty Income Corp.
- Unilever PLC
- Nestle SA
- Estee Lauder Cos. Inc.
- Thermo Fisher Scientific Inc.
- Texas Instruments Inc.
- Emerson Electric Co.
- American Water Works Co. Inc.
- Visa Inc.
Consider a Company’s Overall Growth
While you’re building your portfolio, you should also keep your eyes open for stocks belonging to companies that have potential for growth. For Scott Lieberman, founder of Touchdown Money, looking toward companies that are making big innovations in their industries — while remaining trusted names — is a smart move.
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He cited tech stocks like Apple and Microsoft as potentially great buys since both companies have room to explore and innovate, even as their reputations remain steadfast. Also, if Meta Threads ultimately proves to be successful as the new kid on the social media block, Lieberman said that Meta could have a strong offering that would send its share prices even higher. Though tech stocks can be risky if they’re unfamiliar, you can find great choices within established brands.
Watching the news can give you some insights into broader trends that could help guide you in your stock buying decisions. Anyone who has scrolled a newsfeed on their phone or watched a nightly broadcast is probably aware of recent breakthroughs in weight-loss drugs. With companies like Eli Lilly leading the way in these breakthroughs, its share prices have climbed. Lieberman said that buying now could help you take advantage of the company’s further success.
Look to Exchange-Traded Funds
Kovar also shared that people with $1,000 to invest might find worthwhile opportunities within diversified index funds or exchange-traded funds (EFTs). EFTs are essentially what they sound like — funds that trade on exchanges, most usually tracking a specific index.
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Investing in an EFT gives you a bundle of assets to buy and sell during market hours, which enables you to compile a diversified portfolio while also lowering exposure and risk.
“For clients with $1,000 to invest, diversified index funds or exchange-traded funds (ETFs) offer a simple yet effective way to gain exposure to a broad range of stocks across various sectors and industries,” he said. “These funds typically have low expense ratios and provide instant diversification, reducing individual stock risk.”
If you’re not sure where to start, U.S. News & World Report compiled a list of “10 ETFs to Build a Diversified Portfolio.” Good luck!
