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Don't invest in crypto before a 401(k) or IRA, warns these experts – CNBC

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Select’s editorial team works independently to review financial products and write articles we think our readers will find useful. We may receive a commission when you click on links for products from our affiliate partners.

Many investors are pouring their cash into crypto — with the youngest segment making up the majority.

A recent survey by Select and Dynata found that nearly half (45%) of 18- to 34-year-olds say they have purchased crypto. They represent the greatest share of crypto investors, followed closely by 37% of 35- to 44-year-olds. Meanwhile, only 11% of 55- to 64-year-olds and a mere 4% of 65+ investors are buying into the digital currency fad.

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Investors may purchase coins for various reasons, whether it’s with hope of turning a quick profit, the potential for long-term growth or just to get in on the excitement. Some young investors, however, are choosing crypto over investing for their retirement. And herein lies the problem.

The same survey found that 44% of investors who have less than $10,000 in investable assets are currently investing in crypto, but only 26% have a 401(k) or 403(b) and 17% have an IRA.

While cryptocurrencies can certainly be fun, short-term investments, Lindsey Bell, chief markets and money strategist at Ally Invest, doesn’t recommend putting a substantial portion of your portfolio into these assets or forfeiting your retirement fund.

“Investing for the long term should always take precedence over investing for the short term,” she says. “The advantages of a 401(k) or IRA, including a company match, should be pursued before allocating short-term, fun money.”

Here’s what to consider

Tony Molina, a CPA and product evangelist at Wealthfront (the first robo-advisor to offer crypto access — up to 10% of your portfolio), agrees that the eagerness to join the crypto craze shouldn’t get in the way of building long-term wealth for retirement. And it’s even more important if your employer offers a 401(k) contribution match (hey, that’s essentially free money).

But saving for retirement doesn’t need to mean missing out on crypto if that’s something you’re really excited about, Molina says. If you have a 401(k), he recommends you contribute at least up to the amount your employer will match and then think about buying crypto with the extra funds you have leftover. For example, if your company matches up to 6% of your salary, contribute 6% so you’re first doubling what you’re able to put away before you’re strategizing investing elsewhere.

“I’d encourage investors to think of cryptocurrency as one type of asset class they could include in their long-term, wealth-building strategy,” Molina adds. “Crypto shouldn’t necessarily be the main focus of your strategy because of the uncertainty and risk involved, but it can fit into your portfolio overall.”

Crypto investing, though easily accessible through finance apps like Square’s Cash App and PayPal, comes with risks. Most cryptocurrencies and crypto tokens see significant price volatility, which is why it’s seen as a risky choice for many retail investors.

“While it’s easy to get caught up in the hype and potential instant gratification of crypto or other hot asset classes, it’s important to remain grounded in reality as well,” Bell says. “These types of assets are very volatile, and while they are becoming more mainstream, the future around growth and regulation remains uncertain.”

Don’t have 401(k) access to save for retirement?

For those whose companies don’t offer retirement benefits, prioritize opening a tax-advantaged traditional or Roth IRA before setting aside money for crypto.

“An IRA is a great option for saving for retirement because you have a lot of control over what you’re invested in, you may be eligible for some great tax breaks and you can open an account on your own without relying on your employer,” Molina says.

You can find IRA options offered through many national banks, investment firms, online brokers and robo-advisors. Select narrowed down those offering the best IRAs for all types of investors, as well as the best Roth IRAs for growing your money tax-free. Charles Schwab, Fidelity Investments and Betterment made both rankings.

Bottom line

Whether you want to invest in cryptocurrency because it has performed well in the past or because you feel pressure seeing everyone else do it, it’s important to first prioritize your retirement funds. Crypto’s past performance doesn’t necessarily mean it will continue to do well in the future, and FOMO isn’t a solid reason to get involved, warns Molina.

Investors curious about crypto can get the best of both worlds by first contributing enough to their 401(k) to meet an employer’s match, if offered, or funneling funds into an IRA. If you have extra money, then consider buying crypto but make sure you know what you’re getting into beforehand and don’t allocate more than 10% of your portfolio to these risky investments. Remember, diversification is key to a successful investing portfolio.

“Before you go all in on any investment, especially a riskier asset like crypto, make sure you have a logical argument for why you believe that investment will increase in value over time,” Molina adds.

Catch up on Select’s in-depth coverage of personal financetech and toolswellness and more, and follow us on FacebookInstagram and Twitter to stay up to date.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.

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4 Must-Have TFSA Stocks for Any Investment Goal – Yahoo Canada Finance

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Make a choice, path to success, sign

Written by Amy Legate-Wolfe at The Motley Fool Canada

If you have a Tax-Free Savings Account (TFSA), then you hopefully have an investment goal to go along with it. Now, we could drill down into specific savings goals, but, honestly, those goals change! What someone wants at 30 will be different at 50, and so on. First, it’s student debt, then a house, then a child, their education, and, of course, retirement.

Frankly, you shouldn’t have to juggle your investments every time you come up with a new goal. In fact, one of the main points of investing is to buy and hold for as long as you can. Sure, you can take out cash as your goals come in, but you should be able to hold onto them for as long as you want.

With that in mind, here are four TFSA stocks that will help you achieve any investment goal.

Fortis

If you’re going to have long-term TFSA stocks, you need stable companies to get you there. That would definitely include Fortis (TSX:FTS)(NYSE:FTS). The utility company has been growing its dividend each year for almost 50 years. This comes from a stable business plan of growth through acquisition.

Investors have been flocking to Fortis as one of the TFSA stocks they want because of this stability — especially during the market pullback. The company is basically recession proof, providing gas and electric utilities to 3.4 million customers. You need the lights on no matter what, making it a strong choice for any investor.

Fortis shares are up 16% in the last year with a dividend yield of 3.63%.

TD Bank

The Big Six banks may be trading at all-time highs, but there’s a reason. And that reason is why they’re TFSA stocks for any investment goal. The banks managed to get out of the market drop relatively unscathed, and yet they still have so much cash on hand to make up for lost time. And that comes through solid dividend jumps.

But Toronto-Dominion Bank (TSX:TD)(NYSE:TD) has even more to offer. TD stock offers the most growth of the Big Six banks, with the most amount of credit card partnerships, growing online and United States presence, and the most loan options for solid revenue streams. And yet even after all this growth, TD stock still trades at just 13.42 times earnings.

TD stock is up 41% in the last year, with a dividend yield of 3.47%.

Constellation Software

If you have the cash to invest, Constellation Software (TSX:CSU) is one of the few tech stocks that remains a stable investment. The company has been an acquisition powerhouse, identifying the software companies it believes will thrive with incredible expertise.

It’s those experts that have managed to keep the company growing at a stable clip, even as other tech stocks burn around it. Constellation shares have been steady as a rail, growing through venture funds and seeing revenue rise 30% year over year during the last quarter. It’s one of the TFSA stocks any investor should add as soon as possible before it rises even more.

Shares of Constellation are up 34% in the last year, and it recently boosted its dividend to offer a yield of 0.24%.

Nutrien

Finally, Nutrien (TSX:NTR)(NYSE:NTR) may be on the newer side, but don’t count this out among TFSA stocks. People need to eat, and Nutrien is now the world’s largest crop nutrient provider. As arable land decreases and climate change increases, Nutrien will be a necessity for any portfolio.

Nutrien continues to grow through acquisition. In the last few years, it has increased its digital presence at an incredible rate. This kept revenue coming in at an incredibly important time — for the company and farmers. Now, it’s nearing the three-digit mark and isn’t likely to come down.

Shares of Nutrien are up 37% in the last year, with a yield of 2.57% for investors.

The post 4 Must-Have TFSA Stocks for Any Investment Goal appeared first on The Motley Fool Canada.

Should you invest $1,000 in Air Canada right now?

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Fool contributor Amy Legate-Wolfe owns TORONTO-DOMINION BANK. The Motley Fool recommends Constellation Software, FORTIS INC, and Nutrien Ltd.

2022

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Gulf Energy, Binance announce Thailand crypto partnership

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Binance, one of the world’s biggest cyrptocurrency exchange by trading volume, will set up a crypto exchange with Thailand’s Gulf Energy Development, both firms said on Monday.

Gulf Energy in a disclosure to the stock exchange said its agreement with Binance is a response to the rapid growth in digital asset infrastructure in Thailand.

Binance said it would set up the cryto exchange and related businesses in the country.

“Our goal is to work with government, regulators and innovative companies to develop the crypto and blockchain ecosystem in Thailand,” a Binance spokesperson said.

“The first step is to explore opportunities in an open and collaborative manner. ”

Last year, Binance received a criminal complaint from Thailand’s market regulator, the Securities and Exchange Commission (SEC) for operating a digital asset business without a license.

The Thai energy company has been diversifying into new areas and last year became the major shareholder of Intouch Holdings Pcl, owner of the country’s largest cellphone operator, Advanced Info Service PCL.

 

(Reporting by Panu Wongcha-um; Editing by Martin Petty)

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Toronto market notches 8-week high as energy shares climb

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Canada’s main stock index rose on Monday to its highest level in nearly eight weeks, led by gains for energy and financial shares.

The Toronto Stock Exchange’s S&P/TSX composite index ended up 179.89 points, or 0.8%, at 21,537.45, its highest closing level since Nov. 25.

Gains for the index were notched as shares globally recovered some ground after declines at the end of last week.

“Overseas market action has been positive and we’re basically benefiting from it,” said Colin Cieszynski, chief market strategist at SIA Wealth Management.

The energy sector rose 1.7% as oil prices climbed. U.S. crude oil futures were up 0.6%, with investors expecting that global supply will remain tight despite a rise in Libyan output.

Technology and financials, the Toronto market‘s most heavily-weighted sector, both gained 1.2%, while the materials group, which includes precious and base metals miners and fertilizer companies, added 0.5%.

TSX trading volumes were lower than usual as U.S. markets were closed for the Martin Luther King Jr. holiday.

Canadian firms see labor shortages intensifying and wage pressures increasing, with strong demand growth and supply chain constraints putting upward pressure on prices, a regular Bank of Canada survey said, bolstering bets the central bank would hike interest rates as early as next week.

 

(Reporting by Fergal Smith; Additional reporting by Amal S in Bengaluru; Editing by Paul Simao)

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