Where to Invest $1,000 Right Now

Here are some easy investment options for low- and high-risk investors alike.

| More on:
money cash dividends

Image source: Getty Images

A good practice is to invest any disposable income you find yourself left with after your monthly budget is accounted for. Upping your savings rate is the best way to grow your portfolio faster.

However, the question of “what should I invest in” should be answered based on your risk tolerance. That is, how much volatility or unrealized losses are you able to cope with without panic-selling?

Today, I have two exchange-traded fund, or ETF, picks suitable for low-risk and high-risk investors alike. One offers safety and decent yields, while the other offers strong growth potential.

Horizons High Interest Savings ETF

Horizons High Interest Savings ETF (TSX:CASH) is a great way to keep your money safe in a brokerage account while earning a competitive yield. Compared to Guaranteed Investment Certificates (GICs), CASH has much better liquidity, meaning you can buy and sell it throughout the trading day as you deem fit.

CASH also has virtually no market risk. This is because the ETF simply holds its capital in deposits with various high-interest savings accounts at Canadian banks. If the market crashes, CASH won’t lose any value given that it isn’t exposed to any stocks or bonds.

Currently, CASH pays an annualized gross yield of 4.79%. If the Bank of Canada hikes interest rates further, the yield on CASH will rise again accordingly. In terms of fees, CASH costs a management expense ratio of 0.13%. For a $1,000 investment, that’s around $1.30 in annual fees.

Horizons S&P 500 ETF

Risky investors looking for a high-growth solution can opt for Horizons S&P 500 ETF (TSX:HXS), which tracks the legendary S&P 500 Index. The S&P 500 is very hard to beat over the long run and has returned an annualized 10% since 1957, which is a fantastic rate of return.

What’s cool about HXS is its lack of a dividend. This is actually a good thing. With HXS, the dividend payments are already reflected in its total return thanks to the ETF’s use of swap derivatives. This means that investors who hold HXS in a taxable account can avoid paying taxes on distributions.

In terms of fees, HXS charges a management fee of 0.10% and a swap fee of 0.10% for a combined 0.20%. If you invested $1,000 in HXS, you could expect to pay around $2.00 in fees annually. For maximum savings, consider using HXS in a taxable account.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Tony Dong has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

More on Stocks for Beginners

calculate and analyze stock
Stocks for Beginners

The Top 3 Most Shorted Stocks in Canada Today

These TSX stocks may be up now, but short-sellers are betting they're about to tumble in the next few weeks.

Read more »

Growth from coins
Stocks for Beginners

Got $5,000? These 2 Growth Stocks Are Smart Buys

Are you looking for some smart buys for your portfolio? Here are two great options to buy now while you…

Read more »

Young woman sat at laptop by a window
Stocks for Beginners

3 Stocks Beginners Can Buy in 2023 and Hold for Decades

Are you looking for a simple portfolio to get started as an investor? These three stocks are top performers and…

Read more »

Dividend Stocks

Slow and Steady: Buy this Railroad Stock Now to Win the Race

Investors looking for a solid and growing income should pick up shares in this railroad.

Read more »

A brown bear sitting on a rock
Stocks for Beginners

Where to Invest $10,000 in a Bearish Market

Here are some great options for low-risk and high-risk investors alike.

Read more »

retirees and finances
Dividend Stocks

RRSP Investors: Should You be Worried During a Recession?

RRSP savers might feel like gagging as they watch their investments fall, but stay strong! Especially with these TSX stocks.

Read more »

Businessperson's Hand Putting Coin In Piggybank
Stocks for Beginners

How I’d Build a TFSA if I Had to Start Over

Are you looking to start a TFSA? Here’s how I would build one if I had to start over.

Read more »

Stocks for Beginners

3 Top Stocks to Buy Now in a Once-in-a-Decade Opportunity

Don't wait. These three top stocks are the perfect additions to your portfolio and aren't likely to remain at these…

Read more »