According to a recent study by Forex Suggest, real estate is the most searched investment while stocks are the second most searched investment type in 2022. What it shows is that there is a higher level of investor interest in these two asset classes compared to other assets.
Investors are looking for profitable investments to help them get through this difficult time, as inflation has been rising rapidly throughout much of the world, energy prices have skyrocketed, and many families are struggling to make ends meet. Diversifying your income streams is one way to protect your finances in a world where many major economies are struggling to maintain growth and avoid entering a recession.
During recessions, many people’s livelihoods are jeopardised because failing businesses may struggle to keep up with rising expenses in the face of declining sales. People’s savings and investments are at risk from inflation because of the potential value decline caused by depreciating currency and failing firms. Diversifying your income sources is one way to protect your finances in a world where many major economies are fighting to maintain growth and avoid entering a recession.
If you are looking to diversify across equity, bonds, real estate and gold, Louis Schoeman, Managing Director of Forex Suggest shares his top tips to make the most of investment opportunities.
1. Assess your risk tolerance
You can never be 100% certain that an asset will increase in value once you’ve bought it. Before committing to an investment, an investor will have to weigh the risks against the potential rewards, with each investor having their own personal threshold for the amount of risk they are comfortable with. Once you figure out your own risk tolerance, you’ll be able to invest with much greater confidence and make the most of opportunities as they present themselves.
2. Look for trusted names
When investing in a company, consider how trusted that company name is both within the industry and among the wider public. If a company has a bad reputation for going back on deals, treating its employees or customers unfairly, or is embroiled in scandals in the media, your investment could be sat on shaky ground. Alternatively, investments made in companies that are widely respected and well-liked are less likely to lose their value due to misconduct by staff and business leaders.
3. Diversify your investments
While knowing your risk threshold is a great way of limiting the potential fallout of a bad investment, diversifying your portfolio is another great strategy for reducing risk. By investing in a wide range of companies from different industries and sectors, as well as investing in competing companies, any disaster within a single company or industry is going to have a less damaging impact on the rest of your investments. In other words, don’t put all of your eggs in one basket.
4. Invest in originality
Originality is one of the most valuable qualities an asset can have. To find investment options with the most originality, consider looking for companies that are at the cutting edge of their field, pushing the boundaries of technology or creating solutions to problems that are as yet unsolved. Essentially, if a company is doing something of value that nobody else has managed to mimic, then you may well be on to a winner.”
