Protect against inflation and generate income.
Investing in 2022
As the global economies are still facing the effects of the Coronavirus pandemic, many investors are left wondering what the best moves are for their portfolios. Many of us depend on our investments’ success to achieve our goals, care for our families, and find financial peace. This year high-earning investors are facing inflation and high-interest rates. Overall, investors should be seeking a risk-adjusted strategy. Below we will dive into some of the best investment options for 2022. If you are looking for guidance crafted to your portfolio and needs, contact the experts at Alpen Partners to find success in this unique year.
Best Investments for 2022
There is no rule book that says the investments every investor should make this year to come out unscathed by financial unpredictability, but there are some trends to be mindful of. Below we have listed some of the options to consider. These investments take protection against inflation and growth into consideration.
Cash-flow generating stocks
When purchasing stocks, investors are buying a percentage of a company, known as equity. The value of the equity is based on the estimation of how much the company is worth and how many shares of the company are issued. When an investor owns stock, the company continues to earn money as the stocks are being sold on an exchange. While many investors invest in stocks to earn money through selling and trading, some stocks offer a stream of income. These stocks typically have very low volatility, high yield, and annual profit growth. Stocks classified as income-generating usually have a history of increasing dividends to keep up with inflation. Apple, Microsoft, and Alphabet are well-known stocks for being cash-flow generating.
Another excellent investment option for 2022 is REITs. A real estate investment trust, or REIT, is a company that owns or funds income-producing real estate in multiple sectors. These trusts are usually traded on major stock exchanges. In times of inflation, the price of real estate and the income generated from rental properties will typically rise.
Many investors will place a portion of their wealth into purchasing another country’s currency to fight inflation. Foreign currency can protect an investor from political or other events that could affect their current investments. Capital appreciation is also possible through investing in currencies. Similar to stocks and commodities, the value of a currency can increase, meaning the investor can profit, not just hedge. One of the strongest global currencies today is the Swiss franc (CHF), the national currency of Switzerland. The franc’s value has always been strong, even when other European countries are facing financial strife. This makes the franc attractive to investors from these more tumultuous economies. With a robust financial system and a competitive economy backing the franc, investing in the currency proves to be an intelligent decision. There are several easy ways to invest in the franc, such as through ETFs and the forex market.
Investing in real estate is a great way to fight inflation, invest in foreign economies, and hold wealth offshore. Some real estate investments can earn the investor and their family permanent residence, such as the Golden Visa in Portugal. Also, earning income from rental properties works well because when inflation rises, so does the amount an investor can charge in rent. In addition, the increase in earnings combats losses due to market volatility.
Exchange-traded funds are securities that track a commodity, bonds, index, or basket of assets and are traded like stocks on the stock exchange. They have high daily liquidity and low fees typically. This makes them more cost-effective than mutual fund shares. Like stocks, ETFs experience daily prices changes as they are bought and sold. With ETFs, investors gain the diversification of an index fund and track a wide range of stocks that are trying to mimic the returns of a country or group of countries, similar to mutual funds. The exchange-traded funds make it easy for investors to build their portfolios by meeting asset allocation needs.
High-yielding savings accounts
Investors often look to high-yielding savings accounts since they offer 20-25 times higher interest rates than a traditional savings account. Typically individuals will hold high-yielding savings account with the bank they already work with, which means transferring money is easy and happens with little to no fees.
An investment is considered an alternative when it doesn’t fall into any of the traditional asset classes. Some popular alternative investments include commodities, cryptocurrency, and fine art collecting. These investments are usually held by institutional investors and high net-worth individuals. Sometimes alternative investments have low liquidity, so many consider them difficult to handle. Still, they can also be a great tool to hold a portion of your wealth, offering hedging benefits and diversification. Pensions and other institutional funds may even hold a small portion of their portfolios in alternative investments. While the initial investment cost can be high for alternative investments, the fees remain low due to a lower rate of turnover. Investors often hold onto these kinds of investments longer than other types of investments, resulting in tax benefits. You will probably hold onto these investments for longer than other investments resulting in tax benefits because investments held for over a year are subject to lower capital tax gains. Popular alternative investments include cryptocurrency, gold and other precious metals, and other commodities like water and agriculture.
Investing with Alpen Partners
Fight inflation with a unique investment plan in 2022. Alpen Partners offers expert investment guidance, wealth management, family office, and personal financial services to high-earning investors worldwide. With close relationships with leading Swiss banks, our team can get you on the right track to not only protect your wealth during a tumultuous time but also grow your wealth simultaneously. Our goal is to find the best investment opportunity for you, whether it’s used to fight inflation or any other financial risks mentioned. Connect with Alpen Partners today if you are ready to strengthen your portfolio.