(MoneyHippo.com) – Before investing in the stock market, many people look to seasoned investor Warren Buffett for guidance. However, the way he trades for Berkshire Hathaway may not always translate to everyday investors. For instance, he’s been pulling back on S&P 500 investments but said they are a fine vehicle for other investors. Whether you want to follow Buffet’s lead or follow his words, here are some of the best ways to invest in 2022.
First, consider investing in the S&P 500 Index Fund because it’s the best way to invest across many different sectors simultaneously. It’s impossible to time the market by attempting to choose the bottom and buy in there. Instead, consider buying in increments to vary your cost basis. Buffett suggests being selective if you plan to purchase individual stocks by investing in only those you truly believe in think will do well.
Stocks that historically pay dividends are also an interesting choice. Try checking the Dividend Champions list for consistent payors.
If you feel the market is too volatile, a high yield savings account is an option so that your cash can earn good interest while waiting for the market to settle down. Investors might also consider more secure investments like government bonds, certificates of deposit (CDs), money market accounts, or treasury bills. They won’t earn much in interest but will likely give you a sense of security.
No matter how you decide to invest in 2022, be sure to diversify instead of putting all your eggs in one basket. If an investment choice lowers in value, you have other investments to mitigate the impact on your bottom line.
Copyright 2022, MoneyHippo.com