How Can I Invest $1000 Dollars Right Now? My Top Ten Ways That I Would Invest $1,000 USD
How Can I invest $1000 dollars right now? Depending on the stage of life that I was in, I would invest $1,000 dollars quite differently, and in this blog post I will try and give you different financial products that you can invest a thousand dollars into that will give you either security of principal, or significant growth and capital gains over the long run. If I had an extra $1,000 that someone handed me right now I would probably just throw it into my Ally savings account, nothing too fancy. However once I hit the $25,000 mark in that account again, another $5,000 to $8,000 out of that account would be flowing into Index Funds and a small Crypto Allocation in my portfolio. As always, be sure to read on or subscribe to our blog for additional details and information.
And so, here’s my top ten ways to invest $1,000 in order to profit over the long term:
Certificate of Deposit
S and P 500
Total World Index Fund
Small Cap Value Index Fund
And I’ll tell you why I would or would not pick each one of these throughout this article, enjoy the post!
How Can I Invest $1000 Dollars Right Now? Why I Might Pick A Savings Account
If someone handed me $1000 dollars in cash right now, I would most likely drop it right into my Ally savings account. What I am currently doing in that account is taking every dime I have over $20,000 in there and sweeping it right into my investment account at my current brokerage firm employer. From there, I’m putting something like 80% of it into the S and P 500, a diversified Small Cap Value Index Fund or a Greyscale Bitcoin ETF. This will always keep me with nearly 1 years expenses on hand in cash, and with hopefully an aggressive investment portfolio that I can hold for the long term.
Investing $1,000 Dollars Into a CD
This is another thing I would do if I wanted to be just super cautious with the money. Say I already had something like $1,000,000.00 in a very aggressive portfolio, say 80% index funds, and 20% Crypto and Dividend Growth Stocks. Even with that level of diversification, I am very heavily equity based, so with maybe a High Yield Savings Account with $30,000 in it on top of that, I might just take the $1,000 and park it into a 5 year CD and get the yield on it. There are some marked benefits to doing this even when the Inflation levels are off the charts like they are now, in terms of your personal finances.
- You lock up money that you cannot touch, and get the highest possible guaranteed Risk Free Rate Yield on your money right now.
- You keep your money in cash in case you need it for the future (it’s liquid even thought it’s not liquid)
- You get a better return on your Emergency Fund even though you still keep your money in cash to the point where it isn’t going to fluctuate.
Should You Invest $1,000 Into A Diversified Crypto Portfolio
This is another way to try and grow your $1,000 without completely exposing your portfolio to one specific cryptocurrency. I would recommend doing this via an NYSE traded stock. The only one I can find that does this with enough of a reputation is the Grayscale Digital Large Cap Fund, which already has half a billion dollars in Assets Under Management backing it, which I assume will grow significantly over the next 5 to 10 years. This is in comparison to the company’s largest ETF which is their Greyscale Bitcoin trust, which has had as much as $45,000,000,000.00 in Assets Under Management at one point, down to around $33,000,000,000.00 given the significant fall in Bitcoin over the past year or so. The Greyscale Ethereum trust is another option here, and is a way to get Ether exposure without actually dealing with software coins. This fund boasts Assets Under Management of around $15,000,000,000.00 at its highest point, down to around $11.6B given once again, the percentage fall in Ethereum prices. Once again any of these funds can get you Crypto exposure in your portfolio without adhering to additional tax scrutiny and transaction costs by purchasing actual coins off of Crypto exchanges.
Why Investing $1,000 Into Bitcoin May Not Be A Bad Idea Given The Current High Rates Of Inflation
I have a few reasons why me, someone who used to be a huge proponent against Crypto (Kevin O’Leary used to be the exact same way until about a month ago when he sized up his portion and put 20% of his entire fund into Crypto assets. I imagine this will cause a large increase in Assets Under Management for him.)
How Can I Invest $1000 Dollars Right Now? Consider Ethereum
We are getting a bit more risky here, but as a 5 or a 10 year bet, and as a very small portion of your portfolio, provided you already have an emergency fund, plenty of money in stocks, and no debt, then you can absolutely pull this off. Consider the Greyscale Ethereum Trust as a way to do this without actually resorting to Crypto tokens in order to get exposure, much easier to report on your taxes, much lower fees, and much less of a risk of getting locked out of your Bitcoin wallet and losing all of your capital.
Investing $1,000 Into The S And P 500, The Most Prudent Decision
Even better than Crypto and smarter than a CD because of its awesome diversification benefits, putting this $1,000 into the S and P 500 may just be the most prudent decision over the next 5 or 10 years. I used to be a strong proponent that anyone who didn’t put almost 100% of their assets into the S and P 500 and Global Index Funds was a dummy. But given how high Inflation is, given the fact that I don’t see the US stock market increasing anymore than say 6% annually considering how propped up it is, and with US Inflation at what is currently 10% after the massive spike in gas prices, there is literally nowhere to put your money right now to get a real rate of return on your investments. If the US Stock Market makes 10% this year, and it is down 7% currently, so we need something like an 18% increase from here in order to hit that level, then we would BREAK EVEN in terms of Real Rates of returns after Inflation.
Worse than this, if Inflation is at 10% and the market is down 10% YTD, you have now lost 20% of your buying power. Your $100,000 is now worth $90,000 and your $90,000 now has the spending power of like $80,000, this can seriously deplete your capital over time. To combat this, I am taking an 80/20 position, 80% SPY and Global Index Funds and the rest in Crypto Assets, call me crazy but I want to Hedge Inflation at least a little bit in this crazy US interest rate market. Just look at my blog title, Hedging Inflation is what I am all about!
Putting $1,000 Into a Total World Index Fund for Dividends and Global Market Diversification
This is another thing that I am doing with my Capital currently. A few reasons for this, VT, the Vanguard Total World Index Funds pays a 1.99% Dividend, and it is down like 15% on the year, meaning you can purchase World Index Funds at a discount right now while the S and P 500 is actually overvalued and expensive. I LOVE getting cash flow from my portfolio as well, and I know it’s not necessarily the smartest move in the world since you have to pay taxes on these Dividends. Emotionally for me however it is very smart, as it is very smoothing to have another income source in my back pocket that I fully control, whether it’s $100 a month or $50 a month, it’s free cash flow that comes in no matter what you do.
Why I Might Put $1000 Dollars Into Apple
Apple has surprised the heck out of me and most other investors, having returns that have out-performed just about every single other Blue Chip stock on the market. A bonus to this is that it is somewhat cheaper, being down like 7.5% YTD. It also pays a nice Dividend that we get every quarter, I’ll likely be sizing up some of my positions in Apple as well.
How Can I Invest $1000 Dollars Right Now? Consider Coca Cola For A Safe, Blue Chip Dividend Growth Stock
I really like Coca Cola, to add to this, for a few reasons. Aside from the fact that it is at its all time high, and that with it being rather expensive, it pays a 2.7% Dividend currently, and Warren Buffett has long been a holder of the stock. As an emergency fund that gets some market exposure and that pays a nice quarterly Dividend, it may be worth sizing up some of your positions in KO.
Final Thoughts On How Can I Invest $1000 Dollars Right Now?
And that’s my opinion on investing $1,000 in 2022 in this crazy interest rate environment! How would you invest $1,000 right now? Leave a comment down below and let us know.
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