The stock markets have been trading at near record-highs, even in an uncertain economy. As an investor, this makes it a bit more difficult to know how to invest. Which investments are actually worth your time and likely to provide a return?
These five key investment trends can help you build your portfolio in a smarter way. Whether you want short-term gains or long-term returns, pay attention to these trends.
1. Investment Trends for Finance Technology
The last few months have seen a rapid change in the economy. More businesses have gone online. Retailers who did remain open have pushed for contactless payments.
What does that mean for how to invest? It’s given many fintech companies a boost. Banks have needed to adopt mobile apps to serve their customers at a distance.
Mobile payments are also on the rise as both retailers and consumers worry about cash. Contactless payments are popular. Online shopping is more common now as well, which means online payments are growing too.
It could be wise to invest in fintech companies that offer mobile payments. You might also want to look at companies that power check recognition and payment security.
The last few months have given fintech the boost it needed to break into the mainstream.
2. Blockchain Remains Hot
About a year ago, blockchain was one of the hottest investment trends on the market. The initial enthusiasm has faded a bit, but blockchain remains popular. In fact, the current environment may have put renewed focus on this technology.
Why is blockchain so important? It provides increased security for all kinds of online interactions. In an environment where everyone is switching to online payments, it makes sense security is on everyone’s minds.
While blockchain remains popular for the moment, don’t forget to think about the future. It’s unlikely blockchain will be the be-all, end-all of data security forever, so keep your eyes peeled for new security technology as well.
3. Personal Loans and Lending Pick up Steam
One of the most notable finance trends of the last few years has been the increasing availability of financing options. In the past, it used to be that you had to go to the bank to get a loan.
These days, there are hundreds of alternatives. Payday loans are the best-known. Alternative lending options are available all across the Internet.
Microfinancing and peer-to-peer lending networks have made personal loans more accessible than ever. In the current economic environment, more people need financing options as well. This could push the personal loans industry to even greater heights.
There are a few ways to leverage personal loans as part of your portfolio. The first is to invest in the companies providing these loans. Cabbage and other networks can make for solid additions to any portfolio.
If you have a little bit of capital yourself, you can also take a look at joining a peer-to-peer lending network. In these networks, you can act as a lender yourself and offer loans to others.
If that seems a little risky, then stick with investing in the lending companies.
4. Electric Vehicles Are Driving Stocks Forward
If you’re still wondering what to invest in, look no further than electric vehicles. Many experts have predicted EVs are going to be all the rage in the next few years.
Lockdown may have put some plans on hold, but some countries are already moving away from fossil fuels. Some areas of China are already testing bans on gas-powered vehicles. The EU is set to start moving away from gas-powered vehicles by 2025.
In line with this, there are more incentives for consumers to buy EVs. That, in turn, means there’s more demand, which EV manufacturers stand to benefit from.
Good investment tips will tell you to look beyond the manufacturers themselves, especially in this area. You can invest in auto-makers like Tesla. Don’t forget about the materials needed to make and power these cars.
You might also want to consider investing in companies that manufacturer lithium-ion batteries. Demand for their product is likely to continue growing in the next few years.
You can also go a step beyond this, to the raw materials. Think about the companies that are mining lithium, cobalt, and rare earths. These materials are key in battery production for EVs.
As a result, these mining companies are likely to see increasing demand and rising prices. That translates into a smart investment for you.
5. Sustainable and Responsible Investing
Alongside increased interest in EVs has been a push toward more sustainable investing strategies.
This trend isn’t exactly new, but it’s likely to continue picking up steam in the foreseeable future.
The World Investment Forum has been driving sustainable investing for more than a decade. The latest world investment report suggests more guidance on policy and transformation in this area is needed. This seems especially prudent in these uncertain times.
Millennials and Gen Z are value-driven and they’ll bring this to the stock market. They want to invest in companies that align with their values. Investment portfolios that cater to them will reflect those values.
These aren’t necessarily bad investments either. As noted, EVs are going to be big in the next few years. Sustainable energy, such as solar, is already poised for major growth.
Investors are already seeing the advantages of socially responsible investing. Companies with a reputation for social responsibility are already outperforming their counterparts.
What does that mean for investors like you? It means better returns, even in an uncertain market.
Keep Tabs on Trends
In an uncertain market, it’s even more important to stay on top of investment trends. Luckily, you’re in the right place. Stay up to date with all the latest by checking in often.
With the right advice, you can make smarter investments and grow your portfolio in a way that’s sure to pay dividends. Check out more tips, trends, and advice to keep your portfolio growing.