The stock market was incredibly volatile at the end of 2018, and the beginning of 2019 looks like that uncertainty may persist. If you are planning your investments for next year, you may want to include a mixture of traditional and non-traditional vehicles to grow your money and protect your nest egg from extreme fluctuations.
Here is a list of the seven best investments to make in the coming year which will help diversify your assets and maximize your opportunities for profit in what may be a very unpredictable year.
1. Real Estate
Real estate is known for being relatively safe even in times of high volatility, but be prepared for the formerly ballooning housing bubble to recede somewhat. Keep an eye out for middle market options, including in the second tier of cities which will be getting more popular in a possible recession and the suburbs, which will appeal to millennials as they start to have kids.
If you want to invest in multifamily housing or office buildings, keep in mind that green features and high-end amenities like gyms and co-working spaces are still in demand for rental properties.
You may also want to check out REITS as a good investment vehicle. They had a bad year in 2018, but in some sectors, there are hints they may perform well in the coming year.
No one is getting any younger, and America is aging rapidly. As baby boomers approach their twilight years, many predict an explosion in goods and services focused on this demographic.
Private companies are getting into the business of senior living and assisted care facilities for people with memory issues like dementia and Alzheimers.
Entrepreneurs are also pioneering products aimed at keeping seniors in their homes, with various approaches ranging from AI to medical testing aimed at keeping older people safe and healthy.
Although the current administration in the White House has not acted very progressively in the area of energy, the global trend is towards renewables. Japan expects to host the Olympics in 2020 with all renewable energy sources.
Investing in solar, wind and other sustainable energy sources is good for your pocket and your conscience. But do not overlook traditional energy investment as well.
Oil investing can be extremely profitable and even can benefit you when the prices fluctuate. Done properly, it does not matter whether the price of this commodity goes up or down. You can make money off of oil when price moves. The more it moves, the more you make.
4. Precious Metals
Another popular place to park money when the stock market and bonds become unpredictable is in precious metals.
The value of gold isn’t as influenced by overall market supply and demand as other investments, so people consider it one of the safest investments possible, options on the market today. It typically is used to guard against societal upheavals like inflation, wars, and recession.
Silver is more volatile than gold. Platinum is another popular precious metal investment but its value can also fluctuate with market trends.
You can invest in gold and other metals in several ways. You can purchase actual gold bars and keep them in a safe deposit box. You can also invest in gold exchange-traded funds or gold exchange-traded notes, which are debt instruments that track an index. The latter is a little riskier.
There are even still some gold mines around the world which may welcome your investment.
Many analysts predict that the economy will slow. While a recession may not be imminent, the boom that the market has ridden for years is likely to subside.
When people stop buying houses, they fix them up. Companies like Home Depot are poised to help millions expand their existing abodes to accommodate more kids or aging seniors. As college grads return home rather than move out on their own, families may renovate and turn basements or attics into separate living quarters.
Look to invest in companies that provide building materials and services.
Further, the country’s aging infrastructure continues to cause problems in cities and rural areas alike. Governments ranging from small municipalities to state-wide entities will face pressure from constituents to make roads, bridges, and tunnels safer.
That means increased purchases in concrete, steel, and other materials.
Bitcoin has been a hot topic for years, with a wildly fluctuating value and uncertain legal status. That hasn’t prevented investors from wondering about cryptocurrency, the digital form of money that has been embraced by some progressive thinking international companies to varying degrees of success.
Cryptocurrency is generally considered to be high on the risk scale. It lacks the basic metrics that most investors use to assign value, and its tokens or coins actually have no long-term value. No big businesses have committed to using blockchain, so it is basically untested.
The cryptocurrency market is heavily influenced by emotion, kind of like the tech bubble several decades ago. There is no guarantee your investment will be protected by the SEC or that it is safe, as often claimed, from hacking or fraud.
However, if you have the pocket and the stomach for a risky venture, think of the potential payout. If you had bought $100 worth of Bitcoin in 2011, the value of your investment as of 2018 would total over $2 million. If you are ready for a roller coaster, this is the place to be.
Facebook may have seen a dramatic downturn, and other tech stocks have looked like they were faltering lately. However, investors still seem to like the FAANGs: Facebook, Apple, Amazon, NetFlicks, and Google.
Prices are down for these stock stars, which makes it a good time to get in there if you are not already. Analysts are still excited by growth and sales predictions for these giants.
Although there may be slower growth overall in the US this year, earnings will likely get a boost from the recent tax cut.
Furthermore, new tech is constantly hitting the market, with a lot of buzz around the world of artificial intelligence. Now is not the time to give up on technology!
Best Investments to Make for 2019: Stay Calm and Carry On
Don’t let the recent upheavals in the market spook you. 2019 bodes well in terms of jobs reports, earnings, and other positive indicia.
To find the best investments to make this and every year, do your due diligence, set yourself a budget, and calculate how much you can afford to risk. By approaching your investment in a prudent and forward-thinking manner, you will be able to weather the ups and downs of investing- hopefully with more ups and than downs!