Thanks to the increased popularity of peer-to-peer investment platforms, the past two years have seen a rise in retail investors. Whether it is because someone else was investing or because the March 2020 crisis caused people to reconsider their financial plans, many new investors approached the market over the past two years. While investments can be extremely profitable, they can also cause significant losses.
If you are considering investing in 2022, make sure to check out the tips below.
Consider Investing in the Traditional Stock Market
If you are a first-time investor, one of the safest and most reliable investment types is stocks. These relate to real-world events and their fluctuations are usually connected to economic factors.
Buying stocks is considered a safer bet compared to cryptocurrency because each stock’s value directly relates to how well the underlying company is doing. This means that, unless the company declares bankruptcy or goes out of business, the stocks will retain a portion of their value. What’s more is that fluctuations in the stock market happen at a slower pace, thus giving the chance to investors to adjust their investment strategy.
Cryptocurrency Investments Can Be Risky
If you have ever considered investing in cryptocurrency, you have also learned about the risks that come with this kind of investment. Indeed, cryptos such as Bitcoin, Ethereum, or XRP, aren’t related to physical assets, and their value can skyrocket or drop to nothing within a few hours or a few days. Most of the cryptos’ high volatility levels are due to the fact that their value is connected to investors’ sentiment.
However, if you are investing in this asset money that you feel comfortable losing, earnings can be unlimited. And, thanks to systems such as blockchain technology and non-custodial wallets such as MetaMask, cryptos are secure, tamper-proof investments.
Consider Alternative Assets
In the past, stocks and bonds were some of the only investments available. However, today, also thanks to new virtual and online tools, investors can access alternative investment classes. For example, you could decide to invest in NFTs, collectibles, art, or antiques. These are assets unrelated to stocks or fluctuations in the world’s economy, which makes them an attractive safety net for investors.
A Diversified Portfolio Is the Ultimate Safety Net
No matter whether you have invested in stocks, bonds, NFTs, or Cryptos, some value movements are impossible to predict. That is why, the ultimate safety net for an investor is a diversified, varied portfolio that includes unrelated assets.
Therefore, even if an economic crisis causes the stock market to crash – just like it happened in 2008 and 2020 – you can curb the losses thanks to your antiques, cryptos, or NFTs, which are likely to retain their value.
Speak to an Expert Investment Advisor
No matter what financial goals you have set for 2022, the right investments can help you achieve financial freedom and enjoy a better quality of life. However, investing can represent a risky bet if you are a first-time investor. In this case, consulting an experienced advisor can help you find the best investment strategy for your needs and maximize your gains.