Among the best investments of 2019 I point out the ETF funds ( Exhange Trading Found, that is bond funds that act as containers for securities of an entire stock market index or economic sector ), real estate investments that if well planned still allow us to make good business and as a third I recommend equity crowdfounding and social landing.
Let’s see better in detail.
How to choose the best ETFs, indices and bond funds
When discussing bond ETFs we are in fact talking about ETFs that can be very different from each other, so it should be remembered that a bond is a debt security . It is issued by companies or public bodies able to attribute to its owner, when they expire, the right to reimbursement of the loaned capital to the issuer, to this “repayment” is added an interest.
The obligation is a consequence of what has just been described, a form of investment where the purpose of issuing bonds, on the side of those who issue them, is to find liquidity. The capital that is collected through the issue is subsequently returned to the investors upon maturity of the obligations through the single solution formula, instead the interests are liquidated in different ways:
- Every six months
Among the best investments in 2019, therefore, as we can imagine, ETFs are included, but we need to understand them better before jumping on this type of investment.
The interests that are given on a periodic basis are called “coupons”, given that in the past, to collect them, the numbered coupon associated with the certificate had to be detached. Compared to an investment in the stock market, bonds are generally considered less risky especially due to the fact that they are not subject to listing on the stock market. In another reason, it is because they have a fixed interest rate when they sign the sales contract.
The substantial difference between shares and ETFs is that the shares represent the performance of a single company , instead the ETF represents the trend of a larger portion relative to an industrial segment , if not sometimes of a market or a national stock exchange .
The best ETFs
But what are the best bond ETFs?
Going into the merits of our paragraph it is good to explore which are the most attractive offers on the market today.
You can bet on the ETF bond fund iShares iBoxx $ High Yid Corp Bond which aims to follow the trend of the Markit iBoxx USD Liquid High Yield index . In turn, this index is composed of bonds with a high yield for sale in the USA, therefore it includes small, medium and large capitalization companies in the financial, industrial, oil sector, and also in the tertiary sector.
Another piece of information that you will find useful to understand if this can do for you is to know that the consultant of the fund in question is the BlackRock Fund Advisors, and the fund aims to invest a large part, or 90% of its assets in securities of the index and in investments that go to guarantee an exposure in securities equal to that of the index, essentially to go as far as possible to replicate the trend.
When a real estate investment is well planned
When an investor decides to bet on a property, the decisive element that should represent the foundation of this investment decision is the ability to calculate the return , which can derive from the rent of the purchased property.
Regardless of whether you are a “novice” in this kind of investment or already a landlord who has a large property number, it has no relevance to the fact that the calculation of the property rent is an element that you cannot afford to to neglect.
What is the performance and how to determine it? Yield is a way that is available to measure the future income generated by the investment you decide to evaluate, in the case of real estate yields, returns are of particular importance when dealing with the commercial real estate sector since the Capital growth rates are generally not very high, unlike those relating to the residential real estate market.
So learning how to calculate the return you could achieve today and in the future is a key factor in understanding whether to invest.
How is performance calculated? This is calculated on a percentage basis, and also based on the cost or market value of the property, but also taking into account the annual income and management costs . An element that is not calculated is that relating to the increase in value of the property over time .
When you go to calculate the yield, you need to know that if you are calculating the so-called gross return or net return , you talk about two very different things. The gross return is calculated before making expenses, instead the net return must take into account the current expenses which are for example management fees, maintenance costs, stamp duty and other sources of expenditure, such as taxation for the vacant properties.
What are Equity crowdfunding and social landing
If we talk about better 2019 investments, a look should also be given to the theme of equity crowdfunding and social landing.
The crowdfunding itself is the fundraising that, through the use of the web and the involvement of many people (crowd = crowd), manages to direct sums of money for the realization of a cause or a specific project.
We talk about equity crowdfunding when, through online investment, we buy a holding in a company . Equity stands out from other kinds of crowdfunding due to the specific “reward” expected by those contributing to the project. The proposer – that is the entrepreneur – starts the collection of funding on the chosen online platform by going to illustrate the information regarding the project and the monetary goal to be achieved to put it into practice.
Social lending, on the other hand, is a loan between private individuals based on specific features such as:
- an alternative credit channel to banks and traditional financial institutions
- a service offered via the Internet by specialized platforms that do not receive credit, but focus on ensuring that the platform works by connecting whoever needs a loan with those who have money and intends to place it in alternative forms of investment
- implies that in the face of those requesting a loan (defined as an applicant) there is some person available to finance the loan request (carried out by an investor or a lender).
Considering that for each of these tools it would be appropriate to do further investigations, I advise you to read other articles from my blog, for example, where I talk about investments in a specific way or to write all your questions or doubts in the comments, for example: “how you advise me to start “,” what is the minimum required sum “and so on, I reply within an hour.