Five smart investment tips for 2021

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Are you wondering how the markets will perform in 2021 and beyond? Check out our smart investment tips for 2021 and how to create a winning portfolio.

2020 has been a rollercoaster year for most people and rocked the economy of the world. Whether you’ve been personally affected by the current economic climate or not, it’s prudent to take a moment to consider your investment plans.

No-one can offer any absolute guarantees about what 2021 will hold, but there are some trends which look strong. Don’t forget: diversity lowers your overall risk, so never put all your investment eggs in one basket.

Farming

With other industries hit by various government legislation and regulations, the one constant has been food. People still need to eat, regardless of what else is happening, and this makes agriculture an area of potential profitability.

Buying shares in farmland is a good option for investment in agriculture, but it’s not the only route. Commodities such as corn and soybeans, Farming mutual funds and farming equities are all also worth considering.

Diversify with Spread Betting

There will continue to be challenges in specific industries, which means that traditional stocks and shares may be unprofitable for some sectors. However, you can still take advantage of volatility in the market if you include spread betting in your portfolio.

Spread betting allows you to take up a long or short position on any company or sector, which means even if the economy is on a downturn, your investments will still be profitable. You can find out more about how spread betting works here.

Rental Market

For most of this year, many of us were encouraged to work from home. With more time than usual being spent at home, there has been an increased focus on lifestyle and personal surroundings.

Although there’s expected to be a resurgence in public life as we begin to go out more often, there are some changes which are likely to stick around. Many companies are more willing to offer flexible home working as a permanent choice. It means that space at home will be more critical, and many people may be looking to move into a larger property. Those without an outside area may also be keen to move to a home with a garden as long weeks without free access takes its toll.

During an economic downturn, the rental market tends to flourish anyway, with fewer individuals able to access a mortgage. This combined with the current situation just makes it vital to look at property, which makes the rental market scorching hot.

Renewable Energy

At the time of writing, President Trump is still contesting the eligibility of the US election. Still, experts widely believe that even if his legal challenges are successful, it won’t change the outcome. Assuming President-Elect Joe Biden moves into the Whitehouse, there’s likely to be heightened interest in renewable energy.

Joe Biden has already declared that he intends to rejoin the Paris Agreement, a move that is expected to spike the price in the sector. For 2021 and the years ahead, investing in clean energy ETFs is a smart move. 

Yourself

While not technically an investment portfolio, 2021 is the time to consider what gives your life meaning. Are you in the career that you want, or would you be happier acquiring new skills?

Many industries are going to struggle to sustain the same number of jobs or suffer from a prolonged drop in demand. There’s never been a better time to invest in yourself, whether that’s a total change of direction or studying for more qualifications. You are just as worthy of investment as anything else in your portfolio, so don’t sell yourself short.

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