What is the absolute best place to invest your money for the high returns? To answer this question, you first have to realize two things. First no one can predict the future. I can only tell you what investment performed the best in the past, and based on that information, you may be able to conclude that this same investment will also perform the best in the future.
The other thing you have to realize is that high returns also come with high risk, meaning your principle could fluctuate in value quite a bit. There is no such thing as high returns without high risk. If anyone tries to sell you something that has a high return with low or no risk – that is a sure sign that he is ripping you off and is lying to your face. And you should run.
So because of the fluctuation in value, or higher risk, you should only make a high return investment if you have a long term horizon, meaning you don’t need to touch the money for at least 10 years. If you need the money for an expected expense before that time, don’t put it in this kind of investment
So, as long as you understand these two things, here is the absolute highest return investment over the past. This should be no surprise – Stocks have had the highest returns over the past 50, 75, and 90 years versus any other type of investment. In fact, if you invested $10,000 in the US stock market just 50 years ago in 1969, you would have over $1,000,000 today.
In fact over the past 100 years, the stock market has seen an average return of about 7% per year. At this rate, the value of your investment doubles every 10 years. There is no good reason to think this won’t continue.
Now what you also have to realize is that although this is a spectacular increase, it also comes with risk. This means that some years are great while other years are not so great. In the past 80 years, for example, the stock market had a positive return in 50 of those years, and a negative return in about 30 of those years. So there are ups and downs, but if you stick with it, your portfolio should see a great return over time, as you can see on this chart which is by the way adjusted for inflation.
Again, if you are just looking for the best return and you have at least a 10 year horizon, this would be the place to put it. But if you going to need this investment money for some expected expense, then don’t put your money here.
In that case, I will tell you where to put your money in a future video.
Now, the question is where specifically should you put your money. When I say the “stock market” that is a very broad term. Which stocks do I mean?
So let me answer that. The historical charts I used are for the United States.
However, as you might be aware, the United States has had a spectacular historical economic run. Over the past 100 years, it has been a dominant economic force in the world and the epicenter of global technology and growth.
So its stock market, not surprisingly, has seen a corresponding incredible growth. Will it still be this way for the next 100 years?
That remains to be seen, so to hedge your bet on which country’s stock market to invest in, I would invest in all of them.
How is this possible? It is possible by investing in a global stock index fund, that invests money in stocks of companies located around the world.
And Here’s the one I would look at: (Watch the video to find out)
Why this fund? It invests in not only the U.S. but also developed foreign market, and emerging markets. So you get exposure to and benefit of growth from companies located around the world, in any country that might be the next growth center for the future, including the United States.
And this fund, being a fund from Vanguard, has a very low cost – less than 0.2%. This means that your money doesn’t get eaten up in fees, so you get to keep more of it.
Now you may say, well, in order to get the absolute best return, shouldn’t I invest in the highest growing sector of the stock market, like only the technology companies, because they have had the best growth over the past 20 years?
Well, the problem is no one can predict the future. Although technology stocks like Google, Amazaon and Facebook, definitely performed best in the recent past, they may not be the best sector in the future. You don’t know which sector is going to perform the best going forward. So, I believe the best strategy is to hedge your bet and invest in all the sectors.
So investing in the Vanguard Global Total World Stock Index Fund – hedges your bet because it invests not only in countries around the world but also various industrial sectors.
NOTE – This is for information purposes only, and is not a recommendation to buy any securities or stocks. I am NOT a licensed financial planner. And you should do your own research before making any investment decision.
