Investing is all about planning for your financial future. Whether that's the short-term future, 10 to 20 years down the road, or decades from when you start, depends on your goals. Let’s look at a few ways to make that money work for you.
Read more: Not sure where to start with investing? Take our quiz.
Short-term investing
Thinking short-term can keep you engaged in your investment strategy and give you opportunities to put your money toward what excites you most.
1. Self-directed trading
If you want to be hands-on when investing, consider self-directed trading. While not tied just to short-term investing, you can tailor your investments to your goals and risk tolerance exactly as you see fit. With an Ally Invest Self-Directed Trading account, you have access to research tools and expert insights, and you can be in control of exactly how you want to allocate your investment funds.
2. Dividend investing
If you’re looking to generate an investment income stream, you can explore dividends. You have the choice of investing in individual stocks that pay dividends or dividend-paying funds, such as many mutual funds or ETFs. Remember that dividend stock payments aren't guaranteed — and the payout amount may fluctuate.
Investing for later
Want to let your money sit a little longer? Keeping your money invested for a couple decades can be a more conservative approach to pursuing your financial goals.
3. Diversify your portfolio
Investing in the market isn’t about timing the highs and lows. Individual stocks can be affected by many unforeseen forces and experience volatility in the short term, but a diversified portfolio is a safer way to invest than putting all your eggs in one basket. If you prefer to be hands-off, consider using a robo advisor, such as Ally Invest Robo Portfolio. Our helpful automated tool helps you diversify your holdings with a mixture of affordable ETFs based on your risk tolerance and investment horizon.
4. Real estate investments
If you’re interested in the real estate market but aren’t ready to purchase your own property, consider real estate investment trusts, or REITs, which are companies that own income-generating properties. Returns aren’t guaranteed, and REITs are susceptible to market volatility and price fluctuations — but their dividends may provide a steady stream of investment income for you to hold on to or reinvest.
Whichever approach you take, remember your risk tolerance, as well as your goals and motivation for making the investment in the first place.
Investing for the future
If you and your funds are in it for the long haul, consider these investment strategies.
5. Invest for education
If you’d like to start saving for a child or other family member’s education expenses, consider investing in a 529 plan. These accounts allow your investment to grow tax-free, and the money can be accessed at any time to pay for educational expenses. Helping a loved one pay for their schooling — and potentially avoid student debt — is a priceless return on your investment.
6. Retirement accounts
Investing early and often into your retirement can set you up for more comfortable golden years. If you’re only just starting your journey toward retirement, do some research before investing your money. Consider your choices in terms of investing into an employer-based 401(k) and/or a separate IRA and know the annual limits for your retirement contributions.
Stick to the plan
Whichever approach you take, remember your risk tolerance, as well as your goals and motivation for making the investment in the first place. Whether it’s short-term ownership of stock in your favorite sneaker company or a set-it-and-forget-it strategy, doing so will help you make the most of your investment.
