$ 100,000 to invest – how do you do?


If you had $ 100,000 over investing, how would you do? The choices are many and each choice has specific advantages and disadvantages. Some investments can be considered more secure while others are far more risky.

The choice of channel for investment should be made on the basis of risk appetite, age and time horizon. It is therefore a bit more complicated than just choosing between funds and savings accounts. Too little management, we present here general tips on investments of up to five years’ time and investments in the longer term.

Investments of 1-5 years
For investments in the shorter term, you both want to secure the initial amount and get some return on the money. Investments in time periods of between 1-5 years can be used to save for a cash contribution for a home, education, a new car or the like.

For shorter investments, you should not seek maximum risk. For example, if you place all your money in shares, you risk losing big parts if a stock market crash or general downturn occurs. If the stock markets fall by 20% over a few months, you suddenly have only SEK 80,000 left of your investment. The basic rule is the shorter the time period, the less risky investments.

If, for example, you save money on a home and see to it that you buy your home within two years, shares (or funds) are actually no alternative at all. The risk is too great that you lose money. You don’t want to risk losing your dream home because of the stock market’s whims!

If the time horizon is slightly longer, for example three or four years, you can think of having some of the investments in shares. A broad mix fund can then be an alternative.

Typical short-term investment options are:

Fixed income funds
bond Funds
Balanced funds
savings accounts
Savings accounts with deposit guarantee are the absolute safest choices. Try to find a bank that offers up to 1% interest when saving money. At the big banks you get no interest at all.

Another option that has emerged in recent years is P2P loans. At companies that offer these, your money is used to finance other private individuals’ private loans. Just note that your money is basically tied up for the entire duration of the loans. However, you get repayments and interest paid out on an ongoing basis and you can withdraw this money.

Long-term investments
Long-term investments are those that you do not intend to touch or need to touch for a long time. The type example is pension savings or savings to the children. Investments with a time horizon of over five years can also be used for everything in general to increase wealth.

For investments in the longer term, there is really no alternative to shares. However much the stock market can fluctuate from day to day and from year to year, the truth is that it always yields the most in return over time. Saving on a savings account is definitely the worst option. Inflation will slowly but surely reduce the purchase value of your money.

The simple and quick tip for placing your $ 100,000 over time is to place the money in a broad global fund. Such a fund contains shares from companies worldwide and the fees are usually quite low. Taxes are, moreover, one thing you should always take note of carefully for all your investments. High fees have a very negative effect on your return.

If you want to focus on your savings, you can also consider individual shares. Just make sure you choose carefully and also choose more than one share. Spread the risks over at least ten shares.

For investments in the long term, it is also important to spread the actual purchases. Do not make a single purchase with your $ 100,000, but spread out the purchases over one or more years. In this way, you reduce the risk of buying when the courses are as high as possible.

Tips for more reading
Above tips is not to be seen as financial advice. Instead, our idea has been to give suggestions for ways to invest based on the savings horizon and risk appetite. For more tips and strategies, you can take a closer look at the investment guides and news that webmasters like Avanza and Nordnet present in large quantities. Use these as additional inspiration for how you can invest your $ 100,000.