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 every investor’s investments 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 buy 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.

REITs

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.

Swiss Franc

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.

Real Estate

Investing in real estate is a great way to fight inflation, invest in foreign economies, and hold wealth offshore. In addition, 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.

ETFs

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.

Mutual Funds

Mutual funds are pools of capital collected by investors, which are invested into stocks, bonds, and other instruments. Money managers look over these funds and invest the money for the benefit of the group of investors. Like ETFs, they allow investors to gain from investment types they may not invest in individually – with less risk and less cost. Mutual funds allow for a less expensive way to diversify a portfolio with a single purchase. Mutual funds are both investments and companies. The same way a person buys a share of a company, they buy part ownership of a mutual fund and the assets within. Instead of producing a product or service, a mutual fund company makes investments.

 

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.

Alternative Investments

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.

Dividend Stocks

Dividend stocks allow investors to earn a solid return at a steady rate. With these stocks, investors earn dividends or a regular cashout. Many companies will offer dividend stock, most being established companies that are not in high need of cash investment. These stocks are essential to have in a portfolio for cash flow for investors. Some companies offer 2-3% return annually but often will offer a higher return as the years go on. If you are interested in stocks that will grow at a higher rate than dividends, check out growth stocks. 

Growth Stocks

Growth stocks are shared in companies that are predicted to grow at a higher rate than the average growth for the market. Typically, these stocks won’t pay dividends since the issuers of these stocks are looking to reinvest the earnings they gain to accelerate growth in the short term. Because of this, investors can expect to earn money in capital gains and sell their shares at a later date. A lot of the time, growth stocks are tech companies but aren’t exclusively such. While growth stocks are often a risker option, they can provide a high return when successful. 

Roth IRA

Also known as an individual retirement account, an IRA is a tax-favored investment account that helps individuals save for retirement. A Roth IRA is not set up between an employer and an employee. Instead, a Roth IRA account is set up between an individual and an investment firm. The money can be invested in any way the IRA holder wishes. There will most likely be a healthy range of stocks and other kinds of equities to choose from. Another perk is that money in a Roth IRA can be inherited tax-free. 

Robo-Advisor Portfolio

A robo-advisor portfolio is an excellent option for investors looking to invest money and leave the success up to skilled professionals. With a robo-advisor portfolio, investors deposit money into the account, and the program will automatically invest the funds based on the investor’s goals, risk tolerance, and timeline. The investments can be as aggressive or conservative as the user would like. They can even set preferences such as only investing in stocks. Then, the investor will simply fill out a questionnaire, and the robo-advisor does the rest. 

 

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.