A few years ago, savings accounts were the top choice for investing money. Few private individuals were interested in the securities or property market. However, this has changed in recent years, with millions of people globally now holding securities, funds, and other assets. In the USA, around 56% of adults owned securities in 2021. Yet, new investment trends are emerging, challenging traditional investments.
Cryptocurrencies
Investors can directly invest in cryptocurrencies like Bitcoin, Ethereum, Ripple, and Litecoin by purchasing and holding them on crypto exchanges. This offers significant gain potential but carries high risk due to market volatility. Cryptocurrency investments are ideal for risk-tolerant individuals interested in technological innovation. These investors are often prepared to endure price fluctuations in pursuit of above-average returns.
Alternative ways to invest in cryptocurrencies
Beyond direct cryptocurrency purchases, there are alternative methods for investing. Cryptocurrency funds allow investors to diversify within this asset class by managing portfolios of digital currencies. Other options include investing in mining operations, where new cryptocurrency units are generated, or supporting blockchain startups that develop new technologies. Additionally, investors can explore cryptocurrency ETFs and derivatives that track cryptocurrency price movements without directly owning the currencies.
Stocks
Shares are still in demand among investors, especially in many new sectors. Technology-driven sectors such as artificial intelligence, renewable energies and biotechnology offer exciting opportunities.
Not only older adults, but also more and more young people, are investing in securities. They are part of the investment strategy, especially in the long term. Security is particularly important with a long-term investment horizon. In the past, a lack of transparency on the financial market has had negative consequences for some investors. The financial crisis of 2007-2008 made it clear that there was a need for regulation on the international market. The LEI number has therefore been mandatory since 3 January 2018.
What do investors gain from more transparency?
Companies that trade in securities and other derivatives must register. Various providers offer this service. LEI.net – LEI number online – this would be an international option. The code consists of a unique 20-digit alphanumeric identifier and helps to clearly recognise the identity of legal entities in the financial system.
If consumers want to find out whether their shares’ dealer is reputable, they can check the website of the Global Legal Entity Identifier Foundation (GLEIF). Reputable providers also display this number transparently on their own websites.
Metals
Precious metals like gold, silver, platinum, and palladium have long been considered valuable assets. Gold, in particular, is viewed as a “crisis currency” and a hedge against economic uncertainty. Silver also has industrial applications, while platinum and palladium are heavily used in the automotive industry for catalytic converters, making their prices sensitive to car production and environmental regulations.
Investment Potential of Precious Metals
In recent years, gold prices have surged due to global uncertainties and inflation expectations, reaching historic highs in 2020 during the COVID-19 pandemic. This highlights the role of precious metals as protection against inflation and currency devaluation.
Precautions When Buying Physical Metals
When purchasing physical metals, authenticity is key. Buyers should deal with reputable dealers offering certified bars or coins. Safe storage options include bank vaults, specialized storage services, or secure home storage.
Property Crowdinvesting
Property crowdinvesting has gained popularity as an investment option, allowing individuals to invest small amounts in property projects typically reserved for institutional investors. Crowdinvesting platforms pool capital from multiple investors to fund projects such as apartment buildings, commercial developments, or property renovations.
Advantages and Risks of Property Crowdinvesting
Crowdinvesting’s accessibility is a major advantage, allowing investors to diversify with relatively small sums. This diversification would require significantly more capital in traditional property investments. However, project-specific risks, such as construction delays or cost overruns, can impact profitability.
Tip: Don’t just back one yield horse
Diversification is a core investment strategy designed to spread risk and stabilize returns by investing across various asset classes, including securities, property, metals, and cryptocurrencies. This approach reduces unsystematic risk, as different assets react differently to market changes, enabling investors to benefit from upward trends in some areas while mitigating losses in others.
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