3 ways to invest in the market in 2017
It is hard to give any predictions concerning the year 2017, taking into account all the surprises of the previous 12 months. The downfall of oil prices in January of 2016 was just the beginning, while in December the year 2016 was called “the year of the political earthquake.”
After all of this, what will 2017 bring and what are the best ways to invest?
- Maximize your health savings account
This is a wise way to invest for two reasons: the health savings account (HSA) will let you build savings for health-related expenses in the future & its structure allows it to act as another kind of retirement account.
There are still two things to be kept in mind: prior to age 65, you’ll receive a 20 percent penalty in case you withdraw money for non-medical expenses (furthermore, you’ll also owe taxes). After age 65, you may withdraw money for any purposes, although the funds will be taxed as income (like IRA).
And still, the third advantage is that HSA provides an opportunity to lower your tax bill. The matter is that HSA contributions are tax-deductible, no matter what income levels you have. Also, it is possible to withdraw the funds tax-free at any time for health-related expenses.
- High Frequency trading
High Frequency trading, also known as HFT, is a relatively new form of online trading that is good for small investors as the minimum trade amount may be as low as $25.
The key idea is to predict fluctuations in a price for the underlying asset. It is not important how much the price is going to decrease or increase – the main thing is to predict the direction.
One of the biggest advantages of this financial mechanism is that traders always know in advance their potential profits and risks, which is the basic principle of risk management. More details may be found at Glenmore Investments learning center.
- Dividend reinvestment plans
In general terms, dividend reinvestment plans or DRIPs are offered by corporations to allow investors to reinvest their cash dividends and may be fairly called a great way to build up the value of an investment. Two big advantages of DRIPs are that shares may be bought commission-free and at a significant discount to their current price.
A really appealing feature, especially in case with small investors, is that company-operated DRIPs are commission-free since no brokerage services are required. Apart from this, DRIPs are very flexible, allowing investors to invest as little as $10 or as much as $500,000 at one time.
There is a variety of companies that offer no-fee DRIPs. A good example is Aflac (AFL), the global leader in the supplemental health insurance industry. Other popular options are Johnson & Johnson (JNJ), a large healthcare company, or Hormel Foods (HRL), a large diversified producer of packaged foods. The list, in fact, is large. DRIPs are a great way to diversify your portfolio, but a good research is still needed.