Why investing matters

Investing is important for a few key reasons:

• Investing can help you build a retirement nest egg.
• Investing can help you beat inflation over time.
• Investing can help you prepare for major life goals, like sending your kids to college.
• Investing can have tax advantages, especially for long-term investments.
• Investing can allow you to create an income stream from your money.

This is not an exhaustive list. However, the key point is that there are numerous compelling reasons to begin investing money today.

High-potential investment options in 2026

One of the primary reasons people don’t invest is that they are unsure of what to invest in or how to get started. Here are some of the most common ways to invest your money.

1. Stocks

Let’s be perfectly clear. Almost everyone should own stocks or stock-based investments, such as exchange-traded funds (ETFs) and mutual funds (more on those later).

If you have a 401(k) or similar retirement plan at work, you probably already have money in the stock market. There’s a good reason for this. Stocks have consistently proven to be the best way for the average person to build wealth over the long term.

Publicly traded REITs are the most accessible way to invest in real estate. REITs trade on stock exchanges just like other public companies. REITs can be especially great for income since they are required to pay out at least 90% of taxable income as dividends.

8. Cryptocurrencies

Cryptocurrencies are a relatively new form of investment vehicle. Popular examples include Bitcoin (BTC +0.31%) and Ethereum (ETH +0.01%).

If you have knowledge about cryptocurrencies, you can incorporate them into a diversified investment portfolio.

9. Treasury securities

If you’re investing for income and want as little risk as possible while still maintaining liquidity, Treasury securities can be a great alternative to CDs or corporate bonds.

Treasury securities can be easily bought and sold. You can do so through your brokerage, or you can open an account with Treasury Direct and transact directly with the U.S. government.

Treasury securities (often referred to simply as “Treasuries”) have maturity terms ranging from one month to 30 years, and yields change constantly based on market conditions. As of January 2026, Treasury yields ranged from about 3.45% to 4.9% (annually), depending on the maturity term of the particular Treasury security. However, if you buy a Treasury and want to cash out before it reaches maturity, there’s usually a highly liquid market for them.

Best sectors for investment opportunities

Of course, the best places to invest can vary, depending on your personal investment goals and risk tolerance. However, to give you some ideas, here are some of the top sectors to consider investing in as we head into 2026.

• Technology – Technology is where some of the most exciting investment opportunities live. You’re probably well aware of the boom in artificial intelligence (AI) in recent years, and there are other tech trends, such as autonomous vehicles, Internet of Things (IoT), and cybersecurity, that have tons of interesting opportunities.
• Financials – Although it’s not as exciting as technology, the financial sector could be a great opportunity, especially as interest rates decline. Not only would lower interest rates reduce deposit costs, but they would likely increase demand for loans.
• Energy and industrials – Global energy demand is rising faster than many had expected, fueled by the massive power demand of AI infrastructure (data centers). Investing in businesses that help meet these energy challenges in sustainable ways can be a smart strategy.

Factors to consider

No investment approach works for everyone. So, to figure out the best way for you to invest your hard-earned money, here are some things to think about:

Your risk tolerance

Stocks are not risk-free investments by any definition. Even the most stable companies’ stocks can fluctuate dramatically over short periods. Over the past 50 years, the S&P 500 has declined by as much as 37% in a single year and has risen by as much as 38%.

On the other hand, bonds and other fixed-income investments have less long-term return potential than stocks. However, they compensate for this with steady income generation and minimal volatility.

Time horizon

If you have a kid heading off to college in a year or two, or if you’re retiring in a few years, your goal should no longer be maximizing growth. It should be protecting your capital.

It’s a good idea to shift the money you’ll need in the next several years from stocks into bonds and cash. This concept is known as asset allocation, and determining the appropriate mix is a crucial part of investing.

Investment amount

With $100 to invest, you can certainly get started. However, your approach will likely be significantly different and your options somewhat limited compared to an investor with $100,000 available.

For example, if you want to buy a rental property, you’ll probably need enough money to make a down payment. If you want to invest in a high-yield CD, some of the best options have minimum deposit requirements.

Knowledge level

Investing in individual stocks can be a great way to build wealth — if you have the time and knowledge to do it right. If you don’t, there’s absolutely nothing wrong with investing in ETFs or mutual funds to get hands-off exposure to the stock market.

What type of investment account should you use?

Owning the right investments will help you reach your financial goals. But where you invest can be just as important. Many people, especially new investors, overlook the tax implications of their investments, which can leave them falling short of their financial goals.

Simply put, a little tax planning can go a long way. Here are some examples of different kinds of accounts you may want to use on your investing journey: