An inheritance, winning a lottery or raffle prize, an extra income… Although there are not many occasions, there are some circumstances in life in which you can be graced with a large amount of money. The question, in these cases, is what to do with your money, and more specifically, where to invest 100000 euros or more.
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Where to invest 100,000 euros? The best options for maximum returns
Listed company shares are the quintessential security for equity investment.
They are the easiest way to invest, because all brokers in Spain offer the possibility to invest in a wide range of Spanish and foreign assets.
In the long term, it is one of the most attractive options for maximum returns.
As Professor Siegel showed in his book “Stocks on the long run”, the annual real return (net of inflation) on US stocks between 1871 and 1996 was 6.8%.
Which is close to the sum of the average dividend yield plus real earnings growth over the period (6.51%).
The indexed funds
Given the difficulty of outperforming the market, many experts recommend investing directly in index funds that replicate the main stock market indices and their performance.
According to the SPIVA report, which focuses on the US market, less than 18% of all mutual funds managed to outperform the 10-year S&P 500.
This option is suitable for less experienced investors with a long-term strategy.
In Spain, passively managed mutual funds yield a ten-year return of 7.62% as of 31 October 2021 (Inverco).
The pension plans
Pension plans are the ideal instrument for saving for retirement.
Their special characteristics, especially the restrictions on redemption, and their attractive tax treatment, have led many people to invest in them.
Some pension plans offer very good returns, outperforming the market and other similar products.
Moreover, the costs of this product have been falling in recent years, thanks to the emergence of index-linked pension plans and the regulation of fees.
The ETFs or Exchange-Traded Funds
The term ETF is an acronym for Exchange Traded Funds, also known as exchange-traded funds.
They are a type of investment instrument that works more like a stock than a fund. They are quoted like stocks and can be bought and sold in real time at any time.
ETFs allow investors to obtain a return similar to that of the market. In addition, their low costs, which are much lower than those of other similar products, allow them to achieve results very close to those of the index they replicate. And in recent years, this is good news for any investor.
The Robo Advisors
Automated investment managers, better known as roboadvisors, are one of the latest instruments to achieve high returns.
Its main feature is that it is automatic, in the sense that once invested and the investor’s risk profile is set. The Robo Advisor performs both asset selection and other operations (such as rebalancing) for us.
Like other products, roboadvisors have low fees, and offer a market-like return, as they are often composed of index funds or ETFs.
As a result, they provide the maximum risk-adjusted return to the investor for EUR 100,000 or more.
SOCIMIS and real estate crowdfunding
The real estate market has traditionally been one of the preferred options for Spaniards to invest large amounts of money and obtain maximum profitability, especially in certain specific areas of Spain such as large cities. Normally, this investment is made through the purchase and sale of properties or their rental.
However, there are more efficient options for investors such as SOCIMIs or real estate crowdfunding.
These alternatives, whose benchmark is the US REITs, offer the possibility to invest in real estate together with other investors and thus obtain a significant return from the rental of the real estate.
Invest 100000 euros or more with inbestMe
If you want to get the maximum return and you don’t know where to invest 100000 euros, count with inbesMe to create a careful selection of assets according to your risk, you can invest through inbestMe. With our products you will pay 85% less in commissions and you can increase your profitability with our Index Funds, Pension Plans or ETFs.