It’s always better to start with a hundred dollars than to plan and wait months for the right moment. You can’t count on big profits in this case, but if you learn how to work with a small capital, it will be easier to invest in a larger one.
To earn, we will invest in risky assets, which can be conditionally divided into two categories: super risky (cryptocurrencies, shares of young and fast-growing companies) and stable (ETFs, shares of large and stable corporations, precious metals). In this article, we’ll break down how to build a portfolio and which assets are best to invest in if your budget is only $100.
First Trust Nasdaq Clean Edge & Green Energy
To begin with, include a relatively stable asset in your portfolio. It is better to trust experienced investment funds and purchase a so-called ETF (exchange-traded fund). What is an ETF?
A large investment fund assembles a portfolio consisting of stocks in a particular sector. Analysts at the fund independently analyze and select the most promising and reliable companies. The fund is then offered for trading on the stock exchange in the form of security, where you can purchase it. The resulting security consists of the shares of companies in a particular sector and reflects its general dynamics. If a company’s stock goes down, the ETF goes down in value – and vice versa.
Our task is to choose a stable and promising ETF with good growth potential. To do that, we look for a young, developing sector, such as the green energy sector. The first asset for our portfolio is the First Trust Nasdaq Clean Edge & Green Energy ETF, which tracks the Nasdaq Clean Edge Index. It includes not only green energy companies but also biofuel, electric car, and battery manufacturers. On that basis, this ETF has a wide range of assets with different levels of risk, which means it is well diversified. Because of the strong interest from countries that are adopting clean energy standards, green energy stocks could grow significantly over the long term.
Also, companies associated with alternative energy increased in value after the election of U.S. President John Biden, who actively advocates the development of the industry. It is possible that now is the best time to invest in green energy.
Dogecoin cryptocurrency can hardly be called a reliable long-term investment – but it can be used as an experiment with an ultra-risky asset. Dogecoin is considered a “people’s coin” in the cryptocurrency world, supported by Elon Musk and billionaire Mark Cuban. Elon Musk said that he will help with the development of the project and is already actively working with developers, as well as offering to accept payment for Tesla electric cars in Dogecoin, to which users responded positively.
Many analysts predict that DOGE could grow to $1, but it is not worth the risk, and invest all of your capital in it. It is advisable to use the amount you are willing to risk. The price of Dogecoin is $0.27, and 25 coins for our portfolio will cost about $6.75. Since the risks of this asset are high, investments in it should be small.
One of the oldest car brands, Ford Motor Company, is keeping up with the times and investing heavily in new technologies. Ford plans to double the size of its investment in electric vehicles to $29 billion, of which $22 billion will be used to develop and produce electric cars. It also announced plans to create the Ford Pro division, which will enable the company to work with corporate and government customers, through which it plans to increase revenues. Ford expects that by 2028, the brand’s cars will be united by a single cloud-based system, the basis of which will be a driver assistant service. Against this backdrop, the company’s stock is up 72% in 2021.
Including Ford stock in our portfolio with a long-term outlook looks like a smart investment with great upside potential. The carmaker’s paper value today is $13, which fits our budget perfectly and allows us to buy 2 shares for $26.
Thus, we have built a fairly promising portfolio for a total of $99.75. We shouldn’t expect a fabulous profit – even if all the assets give 100%
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