The coronavirus pandemic continues to rage. Stock markets and investors are frozen in anticipation of what the new year 2021 will bring. But life goes on, and the investment portfolio needs to be built.
Money, shares, apartments: top 3 best options for investing in 2021
- Good old cash
Because of the sad 2020 trends, building up cash reserves may be the best investment strategy. The profit will not be huge, but it is a guaranteed financial cushion that can help prepare for what comes next.
An important principle of diversifying your investment portfolio is the assets division into different currencies. Investors recommend choosing several currencies such as the US dollar, euro and yuan. The key indicator for choosing a currency is the demand for it because liquid currencies are more profitable.
No one can say for sure in what direction the stock market will move in 2021, but, according to Forbes, investing in shares has always been about playing by the average. The averages significantly support the retention of large share positions.
For example, biotechnology is worth considering. It can remain a strong sector in 2021 no matter what the market as a whole is doing. Some commodity sectors are also promising. The global economy is forecast to start working again and commodity prices will accelerate growth.
- Real estate
Given the steady rise in housing property prices, as well as the turbulence in the commercial real estate market, this sector really looks ambiguous in 2021. But that is precisely why it, perhaps, deserves more attention in the coming year.
Another reason to consider investing in real estate is opposition to the stock market. Real estate often shows good progress during a stock market downturn as investors seek alternative investments in shares, Forbes writes.
Art, alcohol and bugs: alternative investments in 2021
The new 2021 continues to cloud the stock markets outlook because of the coronavirus pandemic. In response, Bloomberg Wealth has come up with assets ideas that can withstand the vicissitudes of the 21st century economy. Some of these alternatives are variations on traditional investments, some are completely new, and others are downright weird. They have one thing in common: you don't have to be super-rich to invest in them.
- Whiskey barrel
In recent years, bottles of 95-year-old Scotch whiskey have been sold at auctions for $1-2 million, but enterprising collectors buy whiskey not in bottles, but in barrels. With age, the drink only gets better, and barrels from American or European oak are specially impregnated with vanilla or caramel. Barrel prices start at $11,000 and can go up to $700,000.
With growing demand in Asia in 2021, there are good reasons for such purchases: the cost of rare whiskey has soared 564% over the past decade, and this asset, according to the Knight Frank 2020 Wealth Report, has surpassed not only good wine, but also any other luxury asset.
- Rights to music
Social media now has a strong influence on music: for example, a TikTok video with a man skateboarding to Fleetwood Mac's "Dreams" made the 44-year-old track one of the surprise hits of the year. After that, Fleetwood Mac's two main songwriters—Lindsay Buckingham and Stevie Nicks—have separately sold the rights to their songs in recent weeks. And in December 2020, Bob Dylan sold his entire collection of songs to Universal Music Group for about $ 300 million.
The opportunity for investors is to find a way to get some of the profits. And the modern streaming revolution is making new and old music more valuable. However, investing in the catalogs of legends like Dylan is not easy, and the ebb and flow of the music business is unpredictable.
- Insect farms
The idea of eating insects may scare some people off, but it is becoming more and more interesting as it sees insects as a viable and essential food source due to overpopulation and climate change that are reducing the world's food production. For example, insects can be farmed in much smaller areas and for less money than animals, and that could reduce deforestation for grazing in Brazil and Africa.
Investors and entrepreneurs are investing heavily in growing protein-rich insects. Brussels firm Astanor Ventures raised $325 million in sustainable agri-food startups last year. Funds such as Astanor Ventures serve wealthy families, but individuals can apply to join these funds with a minimum investment of $305,000.