Best Long-Term Investment Plans with High Returns for 2024

How to Choose the Best High Returns Investment Options 2024

While making any investment, its primary objective is to maximise profit. Investors like you and me aim to achieve the highest possible return on our investment. However, it is also essential to understand what kind of return you might get before you invest anything.  

To calculate the return on investment, a profitability ratio, ROI, means the return on investment is used to measure the amount of return or profit. Many investors consider an average annual rate of return of 10% or higher as a favourable return on investment in the stock market for the long term. However, only some investments surpass the market expectations and experience a remarkable upward trend. 

Here, we will examine the specific investment that met and exceeded our anticipated return and outperformed the prevailing market trend.

Key Highlights

  • ROI is calculated on investment, a profitability ratio to understand the return on investment.

  • The average ROI of 10% is considered ideal in the stock market; however, the stock market has significantly outperformed at all times.

  • The average annual return of commodity ETF for the past five years is 4%.

  • The average annual return on real estate investment, particularly in REITS, is 11.8%.

What Are the Types of Best High Returns Investment Options?

Explore the best investment options for high returns and maximize your financial growth with expert advice.

1- Stock Market

As of November 2023, the S&P 500 has posted an impressive return of approximately 21% for the year, surpassing its average annual return of around 10%. The reason behind this resurgence in 2023 is the technology, communication services and consumer discretionary stock. Apart from this, a significant factor that has contributed to this uptrend is the shift of investors from rising interest rates and the hope of potential rate cuts in early 2024.

The Nasdaq composite, where the tech industry has a heavy composition, has surged approximately 37%. At the same time, the Dow Jones, with industrial averages, recorded an 11% increase for the year. All these stock exchanges have surpassed the average annual return of 10% in 2023.

To this performance, “magnificent 7” means the mega tech- Apple (AAPL), Amazon (AMZN), Alphabet (GOOG, GOOGL), Nvidia (NVDA), Meta Platforms (META), Microsoft (MSFT) and Tesla (TSLA) has significantly contributed where all the seven stock has more than doubled the gains of the S&P 500 for this year.

Read More: How to Invest in Stocks?- Important Guide for Beginners

2- Mutual Funds

Mutual funds are the most popular investment for long-term investors looking for growth opportunities. However, not all mutual funds offer the same growth potential, so it is essential to select the right one.

Money market mutual funds provide liquidity for investors but typically yield an average annual return between 3% and 4%. Due to short-term interest rate hikes, these funds have recently experienced returns nearing zero.

Bonds have longer maturities than the securities held by money market mutual funds. Therefore, the companies that issue them pay higher interest rates. The average annual return is between 5% and 6%.

A stock mutual fund has a high potential for return with greater risk. Large stock funds generate around 10% of the average annual return. On the other hand, small company stock has the potential to deliver even higher returns.

Some of the best mutual funds to invest in are:-

The Hartford Core Equity Fund (HGIYX)

  • Expense Ratio 0.45%

  • Dividend Yield 0.98%

  • 10-year average annual return of 11.70%

Schwab S&P 500 Index Fund

  • Expense ratio 0.02%

  • Dividend yield 1.38%

  • 10-year average annual return 11.76%

Dodge and Cox Income Fund (DODIX)

  • Expense ratio 0.41%

  • Dividend yield 3.75%

  • 10-year average annual return of 2.37%

3. Commodity ETFs

Commodity ETF includes various commodities like oil, wheat, gold, silver, corn, soybeans, etc. On the other hand, more focused commodity ETFs concentrate on investing in a single type of commodity, which provides investors with targeted exposure to specific markets or industries.

According to Forbes, the average annual return of commodity ETFs for the past five years has been at least 4%, and the expense ratio of commodity ETFs is around 0.69%.

Learn More: What Are the Best Ways to Invest in Commodities?

Here are some of the commodity ETFs best for investment:-

1- Goldman Sachs Physical Gold ETF

  • 5-year return 10.50%

2- VanEck Merk Gold Trust 

  • 5-year return 10.39%

3- Abrdn Bloomberg All Commodity Longer Dated Strategy K1 Free ETF

  • 5-year return 10.05%

4- Invesco Optimum Hill Diversified Commodities Strategy No K1 ETF

  • 5-year return 10.01%

4. Real Estate

According to the S&P 500, the average yearly return on investment for residential real estate in the USA is 10.6%. Commercial real estate exhibits a lower average return of 9.5%, while real estate investment trusts (REITs) have a higher average return of 11.8%. It is essential to recognise that return on investment can vary depending on the type of property and the broader investment landscape. Factors like property type and market conditions influence real estate investments.

It is also essential to understand that real estate investments operate differently as they are impacted by the rising interest rate, which is a double-edged sword for investors.

On the positive side, higher interest rates can provide opportunities to increase rental income. On the other hand, higher interest rates can make it harder for investors to find a good deal.

Despite market challenges, residential properties offer numerous opportunities, particularly in lower and middle-income areas where the annual rental rate increases by 1.4%. Investors in favourable areas have experienced an average monthly appreciation rate of 2% and a yearly growth of 14.5%—also, long-term appreciation works in their favour. For many investors, building equity in their homes is the promising investment landscape. Such investments provide monthly returns that rise with increasing average rates and offer steady and potential avenues of wealth growth.

Final Words

Many investments are considered the best and have surpassed market expectations. Despite the challenges imposed by inflation and rising rates, some assets have really outperformed. Stock market investments can be considered the best return even during inflation because they have posted impressive returns. On the other hand, commodity ETFs are also good options to diversify your portfolio and hedge against inflation. Consider what type of investment is best for you, and start investing now.

Suggested Articles:

  1. Cheapest House Prices in the USA

  2. How to Attain Financial Freedom

  3. How to Diversify Investment Portfolio

  4. No-Penalty CDs with High Returns

27 Jan, 2024

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