As a new decade starts, many investment experts are looking to the future so they can find the best long-term investments. Finding unique investment opportunities when they’re just emerging is the best way to get above-average returns on investment, so knowing where to look is essential if you’re a solo investor.
Here, you’ll find two unique and promising investments for 2020 and why they’re such enticing opportunities.
U.S. Treasury Securities
If you want at least one safe investment in 2020, then you’ll likely want to invest in some United States Treasury securities. There are four main types of purchasable Treasury securities. The first, Treasury bills (T-bills), are likely the type of security you’d want to purchase if you want to see a payoff in one year. These are zero-coupon bonds that do not pay interest – and with no interest, you may be wondering how these return any profit.
They give you a predictable profit because they are sold to you at a discounted value. For example, if you purchase a $1,000 Treasury bill it will likely be sold to you for $980 – giving you $20 in profit when the bill matures in one year.
All Treasury bills mature in one year or less, meaning you could see those profits realized in 2020 if you purchase early in the year. The second type of Treasury security you might consider is the Treasury note (T-note). These have longer maturity periods, with some offered at 2, 3, 5, 7, and 10-year maturity periods.
They pay a twice-yearly interest payment (referred to as a coupon payment) up to the maturity date and offer a secure way to invest your money with reliable interest payments up. They’re also used as one major way to compare the United States economy to other countries’ economies.
If you’re going al-in on long-term, secure investments, then you may want to look at Treasury bonds. These T-bonds mature in thirty years and pay every six months as Treasury notes do. However, these may not be the best way to hedge your bets in the short term.
There are also Treasury Inflation-Protected Securities, or TIPS, which are T-bonds that are adjusted relative to the current level of inflation. This way, your twice-yearly interest payment is dependent on the current level of inflation instead of being locked in at the value you first invested.
Overall, T-bills and T-notes are virtually risk-free investment opportunities in 2020 that may be overlooked by more profit-hungry investors. They’re a great way to lock in predictable profits and offer a safe way to balance your riskier investment strategies
Corporate Bond Funds
Private sector companies will sometimes issue bonds to raise money for new research and development, marketing, or other projects. While solo investors may find it hard to gain access to these bonds due to their reliance on large financial investors leveraging lots of capital to finance these bonds, there are ways to invest in these bonds in 2020.
Primarily, you could invest in corporate bond funds, which are mutual funds that offer exposure to these corporate-issued funds. In particular, short-term corporate bond funds offer opportunities that will mature in five years or less.
These corporate bonds are fixed-income securities, meaning that they pay fixed amounts of interest over their lifetimes in schedules. Some may pay returns from the bonds on a biannual basis, while others may only pay once a year. But in essence, investing in these funds means that you’ll get predictable cash over the lifetime of these bond funds.
The short lifespan of these funds means that they’re less exposed to changes in market-wide interest rates, making the payouts even more predictable. Of course, some risks are assumed when investing in corporate bonds.
They aren’t FDIC-insured funds, meaning that corporations that run into financial trouble may not be able to pay out on those funds. Financial instability happens relatively rarely, however, so it’s not a huge risk company you’re investing in is before purchasing.