I once read that NOW is always the hardest time to find the best investment opportunities and that sometimes it is anything but easy to make money investing. It’s 2015, and once again, the investment opportunities are out there, if only we can find them. Where could we make money investing in 2015, 2016, and beyond?
People tend to throw the words “opportunity” and “opportunities” around all the time, especially when they are trying to sell you something (like swamp land or desert property). For example, “the opportunity of a lifetime” or “one of the best investment opportunities I’ve ever seen”. We all learn sooner or later that real opportunities are the exception, not the norm. Let’s keep that in mind as we try to figure out how to make money investing in 2015, 2016, and beyond.
If you have a brokerage account with a discount broker, the world of investment opportunities is available to you for a cost of about $10 per trade. In one account, you can make money betting on stocks, bonds, interest rates, commodities, and a wide range of markets, both domestic and international. Your broker’s website should have plenty of information for you to look at, but it won’t tell you where the best investment opportunities are in 2015, 2016 and beyond.
Here’s a good way to look at it: it’s always a good time to look for the best investment opportunities, but it’s not necessarily an easy time to make money investing. For example, natural gas may seem cheap, but its price has been falling for several years. Interest rates are near all-time lows, but that has also been the case for years. On the other hand, stock market volatility has decreased while stock prices have continued to rise. Stocks in general are now quite expensive, and super low-interest rates have made bonds expensive by historical standards.
Whatever happens in the markets over the next couple of years, the best investment opportunities are often available to average investors in the form of ETFs (exchange traded funds) that trade like stocks. If you don’t have a brokerage account, go to a financial website like Yahoo Finance and review the ETF performance section… looking for the best and worst performers for various time periods. You’ll be surprised at the wide range of opportunities available. Now you have to decide how you want to try to make money by investing in these funds.
Let’s look at some extreme examples you might find in early 2015. The best performer over the last 3 years (up 94%) was a Leveraged Equity fund that invests in healthcare stocks with 3x leverage. It was also up 20% over the last 3 months. The worst performer was a 2x leveraged volatility fund, which was down 90% over the past 3 years and 15% over the past 3 months. Other big losers include gold equity funds and leveraged inverse equity funds. The real question is: Will you jump on the big winners to make money investing? Or will the big losers be the best investment opportunities for 2015, 2016 and beyond?
Here’s a real-life extreme example from early 2015. The best investment over the last 3 month period was a 3x LEVERAGED INVERSE CRUDE OIL ETF. It was up 285% (in 3 months). What is it? INVERSE means that when the price of oil DECREASES, the share price of this fund goes up; and 3x LEVERAGED means that it is designed to go up 3 times as much (in percentage terms) as the price of oil goes down. This was one of the very best investment opportunities in the months leading up to 2015, as oil prices then began to drop like a stone. But after a gain like that, it’s probably not the best investment anymore if you want to make money in 2015 and beyond. This was yesterday’s opportunity.