What can UK-based investors look forward to in 2022? In addition to inflation and continuing supply-chain troubles, energy and home prices will likely rise, but not as much as during 2021. General investing opportunities abound, even amid a turbulent economy. How should individuals take advantage of the upcoming risks and opportunities in the UK and elsewhere?
Inflation
For anyone who wants to save cash in a low-interest bank account, there is a worthwhile alternative. Investing in the stock market, particularly this year, offers people a clear, uncomplicated way to offset rising prices. Savings accounts don’t have a whit of a chance to keep up with inflation, but brokerage accounts do. The caveat is that you need to actively trade securities and build up a stock share portfolio in order to have a chance at beating inflation. The good news is that account setup is a simple and fast affair, and you need not be a financial analyst to research top corporations and purchase their shares for your account. Those who open an AvaTrade forex trading account can speculate on currency pair values in the hopes of offsetting the effects of inflation on personal savings.
Energy Prices
Economic recovery is a double-edged sword, particularly for UK residents who are uniquely susceptible to energy price increases. No one expected the fast growth in energy demand that took place in late 2021 when businesses began opening up after the initial COVID shutdowns began to ease up. The surge in demand sent prices of oil and natural gas sky high, but investors made out quite well. What’s the positive side of high energy prices? For investors who own shares in producing companies, there’s potential to snag healthy profits before demand dies down. This style of investing is common in many sectors, not just in energy. Whenever prices in a product or service sector begin to go up, individuals play the other side of the coin by purchasing shares of those very companies.
House Prices
The early months of 2022 could be an ideal time to take advantage of rising house prices in the UK and other developed nations. Right now, demand for single-family homes is up by at least four percent and could go higher as the economy recovers and more people begin searching for property. With wages up across the UK, the entire residential real estate sector could present an excellent investment opportunity.
Investing
The growth of raw investing numbers that began late last year is finally beginning to cool off. Perhaps the slowdown is related to a continuing COVID effect or the realization that an economic resurgence will take more time than expected. Whatever the rationale, UK-based investors can expect a modestly rewarding year, especially in light of the fact that dividends are back. Many corporations that slashed dividend amounts or canceled the payouts altogether during COVID shutdowns are reinstating them. Against a backdrop of that good news, it’s important for everyday investors to understand that a market correction could also be in the cards. What’s the opportunity in such a scenario?
Aim for solid stocks and dividend paying shares if you’re a conservative type. If you want more risk, consider shorting shares of companies that look to be in trouble. If you want to be somewhere in the middle consider using a UK investment app to coach and inform you. Note that companies who profited on pandemic-related products, particularly healthcare items, still have room for growth as variants of the original virus continue to roam the earth and wreak economic havoc.
Cryptocurrency
The crypto sector comes with a unique set of opportunities and risks for investors. While alternative currencies continue to build widespread acceptance, the volatility factor scares away large numbers of otherwise interested parties. However, it appears that institutions, governments, individuals, and corporations are finally choosing to add cryptos to their portfolios. Some do it for the FOMO factor (fear of missing out), while others use assets like bitcoin and Ethereum as hedges against inflation and to balance more mundane holdings like stocks and bonds. What’s going in in UK markets with respect to cryptocurrencies?
In spite of dire warnings from government authorities late last year, citizens in the UK and elsewhere continue to press ahead and build strong demand for the top coins. And it’s not just individuals who are driving the thirst for alt-money. More retail establishments accept crypto, a growing number of corporations carry it on their balance sheets, and some of the largest payment providers now accept it as legal tender. For 2022, it’s looking like worldwide use of cryptocurrency will at least double and possibly triple.
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