Description: Given the high level of financial uncertainty that exists, many are looking to diversify and explore international investment options that may be lucrative.
The impact of 2020 on the global economy
It is common knowledge that the entire world is still reeling from the impact of the conditions of 2020 in all aspects. Although some conditions have improved, the near future still looks somewhat bleak. Last year was characterised by job losses, disruptions in business operations, business closures, weakening currencies, increasing death tolls and a high level of risk and uncertainty. General consensus is that everybody was forced to reassess their finances and way of living, prompting innovation and a new wave of interest in investment opportunities. It is partially for this reason that there has been an increase in people exploring options such as trading and investing abroad.
Investment opportunities to consider
Due to the fact that some economies suffered more damage than others, there are still international investment opportunities worth pursuing. However, it is advisable to do the necessary research on the relevant exchange rates, strength of said currencies, as well as expert projections and forecasts on the matter. Below are four alternatives to consider when looking to invest abroad:
Property has taken a huge knock to an extent, particularly when it comes to commercial and tourism properties. Residential properties are said to still be a good investment as they are in demand, people will forever need a place to stay, which is why this type of property investment is still worth looking into. Bearing in mind the limitations on travel and tourism and the fact that most companies have shifted towards remote working, the first two property types carry a higher level of risk.
In 2020, technology became the key component for connecting people for both business and leisure, therefore, some tech companies are sure to have grown in leaps and bounds. Given the current living and working conditions, companies that provide work-from-home solutions and home entertainment are believed to be a good investment. Yet again, it is about investing in economies that are strengthening and growing in 2021, such as America.
Trading currencies is a highly championed way of protecting your finances, however, the effectiveness of this depends on choosing the right currencies to trade. Despite the year that was 2020, some currencies were affected to a lesser degree than others, such as the known safe-haven currencies that are generally able to withstand volatility. Currencies such as the USD, EUR, JPY and GBP are listed amongst those, with the USD said to still be the most prominent and stable of the lot. In order to truly capitalise on the Forex market, it is often advised to trade in popular currency couples to reduce chances of loss. The most traded currency couple is still the USD/EUR.
- Exchange-Traded Funds (ETFs)
ETFs comprising international bonds and stocks are another avenue to explore. The goal here is to diversify and not limit your interests by keeping all your eggs in one basket, so to speak, and ultimately end up missing out on lucrative opportunities. Needless to say, now more than ever it is vital to tread carefully and strategically. There are various ETFs or mutual funds that investors can choose from, such as Country Funds, International Funds and Regional Funds.