Have you looked at your investments lately? Are they suffering losses? Are you having second thoughts on your initial investment plan(s)? Well, you’re not the only one.
Today’s global economic structure is one of caution, worry and fear. However, with every pessimistic outlook also comes the opportunity for prosperity. In order to accumulate wealth through wise investments in this tough economic climate, one must conduct research and have patience.
Although the future of the Western economies is bleak, there is the prospect of reward in certain sectors and nations. With the West accumulating vast amounts of debt, the East is investing wisely, some more than others of course.
There are tips to follow to achieve financial success. If you adhere to some of these measures, you could have a better chance of being ahead of the pack.
Research
Many investors simply do not do the research necessary to make a smart investment choice. Some often listen to the financial planners at financial institutions, while others simply follow the advice of their friends, colleagues or television personalities.
If you invest in mutual funds, for example, find out what that entails. Does it include bonds? Does it have exposure to precious metals? How much does it yield in returns? Also, compare banks and find out what others have to say about it.
Remember, an hour of research will save you hundreds of dollars in the end.
Precious Metals
In an age of uncertainty, investors often flock to precious metals to hedge against the inflation caused by central bankers. To avoid the devaluation of your money, look at metals such as gold, silver or copper. Although gold is quite expensive, even a small amount can go a long way.
You can invest in precious metals either by possessing bullion or by purchasing stocks that are affiliated with precious metals, such as mining or exploration companies.
Note, though, investing in precious metals shouldn’t be done as a profit-motive, but as a method to protect your wealth – it’s an added bonus to receive profits from your initial investment, though!
To give you a perspective of how much bullion nations are buying, within the first three months of 2011, China doubled its gold holdings. India has also accounted for nearly a quarter of gold investment demand.
Commodities
We touched upon precious metals, which are a commodity, but exposing your portfolio to this investment, such as agriculture and food, is great to sustain your wealth. Again, you can purchase stocks or buy futures.
At the beginning of the 2008 crash, many agricultural products, like wheat or fertilizer, soared as high as 50 percent. Those who saw an opportunity reaped the financial benefits. With food shortages happening all over the world, agriculture is a fantastic investment for years to come.
Global Reach
Many consider investments in the United States and much of Europe as dangerous due to their debt problems. Although there are places to make profit in the aforementioned, a lot of smart investors are looking to places in Asia and the Pacific (Australia and New Zealand) for investment.
Compared to Western nations, China, Singapore, Australia and New Zealand have all outperformed. Australia and New Zealand have resources, Singapore is pro-business and China has vast pockets, low debt and high demand of commodities.
Additionally, the aforementioned countries have strong currencies – many foresee the Chinese Yuan increasing in its value, despite the government’s best efforts to suppress its valuation.
Mutual Funds
For novice investors, mutual funds are a great way to have a mixed portfolio. You can expose yourself to Asian tech companies, while also having some of your money in Australia’s resource sector and the New Zealand government.
Of course, as always, you must do your research to find out how much of your funds would be in what. As mentioned before, see what the mutual fund includes. Will 50 percent of the mutual fund be in bonds? Will a quarter of your investment be distributed to energy companies?