What investment has the best ROI/year?

When it comes to investments, knowing what to invest in is only ½ the picture. You also need to know when to invest.

If you have all the time in the world to wait, then anything with a steady return is a good option. If however, you want your return sooner rather than later, you have fewer options to consider.

Let’s take a look at historical investment examples and compare their ROI over time.

Gold

Gold is a great hedge against inflation and is a stable investment since it is a natural resource that has been traded for a very long time. In addition, given that it is a natural resource, there is a limited circulating supply which gives it a certain scarcity. Historically, gold has seen good return on investments, but ultimately its ROI is dependent on global demand.

If we look at the change in value of gold over a 20 year time frame (Jan 2003 to Jan 2023 for example), there is a 411% ROI. Long term it’s bound to appreciate in value, but for a 20 year investment, I’d expect more than 4x my money.

Real estate

Being from Toronto the real estate market is always a hot topic of conversation since the cost of housing continuously soars. If we look at the change in price of a detached home since 2003, we can see that it has increased over 300%. That being said, I understand that Toronto has a crazy real estate market and other jurisdictions may not see the same level of returns.

The current price of housing makes it very difficult for anyone not already owning a home to get into the market but it has also generated amazing returns for those who were. Who’s to say where the market is going, but having got in just 20 years ago is almost certain to have consistent high yield returns.

Looking at the 20 year return you have a +300% ROI.

Tech Stocks

Tech Stocks have been really profitable for investors, with Microsoft, Apple, and Amazon leading the way. Let’s zoom in on Microsoft specifically as a case study. The best time to have invested in Microsoft stock was in the early 90’s as they went public in 1986 and by the 1990’s they were a dominant player. If you got in during 1990 for ~$1/share and sold at the dot com height (10 years later) for ~$57/share, you would have made 5600% on your investment (56x).

While in hindsight, that investment is a no-brainer, in reality it’s a combination of proper timing, knowledge of the evolving market and access that would have made that return possible. If we look at the same investment over a different chunk of time (January 2003 to January 2023), the return isn’t as impressive and would have been 1120%. Still pretty good but nowhere near 5600%.

Bonds

Bonds are considered much safer investments and yet the yields have taken a dip in recent years. For people with lots of liquidity, bonds are a great way to make steady returns year after year, but they leave much to be desired for those looking to build their fortunes.

In 2003 the Bank of Canada bonds yield was just over 5% but the current rate is sitting at 3.18%. This is a lot lower than the other examples, but much safer in comparison.

Ultimately, if you are playing with a large fortune, bonds are the way to go but if you are trying to make said fortunes, bonds don’t cut it.

Crypto — Bitcoin

Bitcoin is a relatively new type of investment that has been around since 2009 (though most charts don’t report their value until 2015) but it’s worth mentioning for its significant ROI. If you got in in 2016 and sold during the height of the recent bull run (2021) you would have made nearly 10,000% your money (100x return). If we compare how long an investor’s money was tied up in either Bitcoin, real estate or tech stocks to see significant ROIs, we can see that Bitcoin has the best returns in a fraction of the time (6 years versus 20 years for real estate and 10 for tech stocks).

So, what can you get into NOW that will have even better returns in a shorter time?

Altcoins

Altcoins, or crypto startups, have shifted from being a currency, to being project backed. While some are meme based with no real substance and can offer unbelieve returns, the project backed altcoins have even better returns in a shorter timespan.

Take Solana for example. If you got in in August 2020 for $3.5 a coin, and sold near the height at $236, you would have made over 6000% ROI (60x). While not as high as Microsoft or Bitcoin, these returns were realized in just over 1 year.

It’s that short timespan that’s appealing to investors as they don’t need to wait a decade or two to see returns. And this is just one example of the thousands of alt coins that have had similar peaks.

So, how do you get in on these or decipher the good from the bad? Well, there’s still a high barrier to entry, and knowing how to do the proper research is very difficult and time consuming.

That’s the problem we’re trying to solve with THONIC. Our platform focuses on education and professionally researched reports, making it easier for people to get started, and to be able to invest with confidence.

Our platform is in alpha, but to get on the waiting list of beta access go to Thonic.Fiance today.