Where should you invest your money in 2022?
As a result of the high inflation and the impact of the war between Russia and Ukraine, our money is losing purchasing power. Therefore, the role of good investments is becoming increasingly valuable in the current economic environment. Let’s see what the experts suggest on how to invest your money in 2022.
According to experts, both saving and investing are very important in the current economic situation. When it comes to investments, it is best to become well-informed about the process. We should only allocate our money to such investment tools whose operation is clearly understood and transparent for us. It is also important that we do this with the money we have set aside, which is not for day-to-day living expenses but is expected to pay off in the longer term.
Three things characterise an investment well: yield, liquidity and security.
According to financial experts, an asset that promises a good return and is liquid may not be entirely safe. What is safe, on the other hand, does not necessarily promise a good return. This is another reason why it is important to know your own risk tolerance before you invest – reported by Startlap. The more riskier assets and the higher returns you want to achieve, the more important it is to be well informed.
Government bonds
Bank products such as current accounts and fixed deposits are the easiest to access. However, interest rates of 0.01% and 0.03% are not considered profitable solutions compared to the inflation rate of 7-8%. There are more rewarding forms of investment. For example, investing in government bonds. In the case of the MÁV Plus government bond, there is no inflation tracking, so it is worth monitoring the performance of the investment in terms of yield. In the case of the Premium Hungarian Government Bond, there is inflation tracking, so you can expect even higher returns. Prior to investing in a government bond, it is worth learning in advance about the terms and conditions, the market situation and the potential risks.
Shares
It is also important to be aware of the market environment before investing in shares. The current war and rising inflation are questionable to prevent economies from going into recession. It is important to expect a fall in the exchange rate and other economic downturns. According to experts, a structured investment fund may pay off better than individual stocks. Investing a large amount in one stock can carry much more financial risk than a diversified mutual fund.
Real estates
When investing in real estate, it is important to consider how much of your savings you want to allocate to this type of investment. Few people realise that a garage can be a relatively low-cost real estate investment. However, those who are currently planning to invest in a home may take out a cheaper loan. The rise in the central bank’s interest rate will also push up the interest rate on home loans, making property increasingly expensive. If the investor chooses to invest in short- or long-term housing, they can expect a steady monthly income. This can be used to pay the loan on the property.
If you do not have this amount of equity, a real estate investment fund can be a good solution. In this case, the profits come from the construction and sale of the property, or the fund distributes the rental income back to the investors.
Gold purchase
The role of gold purchase has become increasingly valued, with a significant price increase of 150% in recent years. If you want to make a big profit, investing in gold is not the way to go. It is a form of investment that works best as a stabiliser for our investments. If one is not able to invest a large amount in gold, gold mining shares can also be a good alternative.
Currency exchange as an investment
With the forint constantly weakening, many people think that currency exchange can be a good investment in these times. The financial experts highlight that in this case, it is crucial to be careful. If you want to be protected from exchange rate risks on an ongoing basis, you should choose this form of investment for a specific part of your savings. Additionally,
it is also important to build a strategy to prepare for the next best move by monitoring exchange rate movements.
Sports cards, Lego
Non-traditional investments are gaining popularity in today’s digital revolution. As a result, more and more people are trading sports cards or legos, whose market is continuously growing. In this case, we are talking about a riskier form of tangible investment, as it takes place in the digital space. However, with the right expertise, it is possible for the investor to realise high returns, so it is also a possible option in the repertoire of investment tools.
Crypto world and security
It is a form of investment for which the ability to take risks is essential. It is important to bear in mind that this is an unregulated market, which is increasingly being driven by social media. We hear a lot about how much money is being made from this form of investment, but less about how much money is being lost by the less fortunate ones. It is crucial to be aware of both the pros and cons. Often, these instruments are misappropriated, or coins that initially looked promising may be devalued. By investing in cryptocurrency, we can expect extremes: huge gains or huge losses. It is also important to check the background of the company to make sure that the parent company is safe and legal. This is important to know not only in the bitcoin market but also for start-ups.
Read alsoBuying crypto anonymously – Pros and Cons
Source: startlap.hu