Current Investment Trends Post COVID
COVID-19 changed the way the world looks at a lot of things, one of those being investments. The pandemic negatively impacted many traditional investment options that offered good returns. Job losses, shutting down or downsizing various businesses, impact on the supply chain, etc., made investors rethink their strategies.
What Has Changed In The Investment Front?
Focus on ESG
As the world is emerging from the impact of COVID-19, it has become clear that investors are keen on options that offer more reliable, long-term returns rather than alternatives that provide high but unreliable returns. The focus is now shifted on strategies that cover the Environmental, Social, and Governance(ESG) theme.
The trend is to invest in ideas that can have a long-term impact on the planet and the lives around you. Green energy, sustainable business ideas, investment towards racial equality, healthcare, education, etc., are just a few of the avenues to consider.
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Investment in Real Estate
The real estate market is bouncing back thanks to various initiatives by governments all over the world. COVID-19 severely impacted the global supply chain and brought forth the need to create a robust logistics network.
Logistics real estate such as warehouses is in high demand. REITs or Real Estate Investment Trusts are a great way to invest in commercial and residential real estate without heavy capital. The average annual ROI from REITs over the past decade was 9.5%. REITs let you reap the benefits of real estate investment while removing the high entry barrier typically associated with real estate investment.
Diversify Your Portfolio
Financial advisors have always stressed the need to have a diverse portfolio, but investors are paying more heed to the advice post COVID. Having a diverse portfolio protects investors during market fluctuations. The profit in another can offset the loss in one domain. Diversifying the investment portfolio to protect investors from a loss has gained more importance in the post-COVID world.
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Alternate Investment Options
Did you catch the hype surrounding Bitcoin and Elon Musk? Musk’s comment boosted the price of Bitcoin, and the whole debacle did manage to renew interest in crypto.
There is no denying that the value of crypto has increased steadily, making it a great investment option. Bitcoin’s value has become four times what it was last year.
Another alternate investment option that gained steam during the pandemic is gold. Gold has proven to be a highly stable asset globally, with the annual return for the year 2020 being 24.06%. Gold also proves to be valuable collateral when you need to take a loan.
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What Has Remained the Same Pre and Post COVID?
While there has been a significant shift in investment trends, many things have remained the same. Despite fluctuations, shares remain highly favorable among investors. Shares are seen as a good source of passive income and liquid cash as they can be liquidated when in need, and the profits help expand your portfolio. The initial slump in the market at the beginning of the pandemic did scare new investors. But with the markets bouncing back to normal, many are returning to this classic investment choice.
Key Takeaways
Investing your hard-earned money deserve careful consideration and deliberation. It is essential to look at all the available options and consider your goals before making a decision.
References
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