By Roger James Hamilton, Founder and CEO of Genius Group
Since March 2020 we have seen unprecedented movements in the financial markets. The COVID-19 pandemic triggered one of the most rapid global crashes in financial history. Nonetheless, the stock market and businesses regained ground quickly and the year eventually closed with record highs in all major indexes.
Globally, Governments have been spending big on stimulus packages, and inflation is set to hit record numbers as we move into recovery mode. We are living in unprecedented times and we are heading into what experts agree is a highly unpredictable future for investors and businesses.
Yet, in times of the greatest crises lie major opportunities. Now is not the time to continue with the same investment strategies you had been doing prior to 2020. This year is about leveraging low interest rates in high growth markets. Here, we look at five key investment trends that are set to soar this year.
1 Hedge and Hold
Property is a key hedge against inflation. We are seeing disruption in the property markets where increasing numbers are investing outside their normal currency and using cryptocurrencies in particular. This makes perfect sense as there’s little point in your property investments going up by 20% if your currency decreases by 20%. So, think about hedging against your country as well as hedging against your asset base. The strength of cryptocurrencies is increasing exponentially. Elon Musk has been credited with boosting the prices of bitcoin in particular, with huge rises in the past year. Tesla made headlines recently when it bought $1.5 billion in bitcoin, with plans to accept it as payment. And the company stands to profit more from this transaction alone than any of its regular business activities. They’ve already made over $1 billion dollars because bitcoin’s value has increased massively. Other companies are likely to follow suit.
2 Double Down on Disruption
Looking back to the stock market crash of the 1920s, if you’d have told people then that within the next decade TVs would become readily available in people’s homes and TV networks would become industry giants, they would’ve been sceptical. Today, we need to look towards the disruptive technologies that will skyrocket in next 10 years. Learn from renowned investors like Masayoshi Son, who was one of the first to invest in companies like Yahoo, Slack, Uber – all highly lucrative ventures in disruptive tech. The four key areas to focus on now are: Fintech, Edtech, Greentech, Medtech – all trillion-dollar industries that are transforming the business landscape.
3 Digitize Your Assets
We are living in a vastly different world to 20 years ago when money itself is no longer the highest transactional value. We are shifting away from that. The popularity of Non-fungible tokens (NFTs) is soaring in 2021. NFTs are basically a tool for providing proof of ownership of a digital asset that can be attached to anything from a Tweet to a JPEG image. The NFT market is already valued at $1.7 trillion. If you aren’t familiar with how it works, it’s time to get to know it. Artists, influencers and celebrities are making huge profits using NFTs and their use is becoming more mainstream. Take digital artist Beeple, who sold a collection as an NFT through auction house Christies for nearly $70 million recently, making him one of the most valuable living artists in the world. In future we will see the same thing happening with physical objects as well as digital entities. The speed of pace at which this is taking place is accelerating massively and your investment strategies need to take this into account. We are going to see property owned via NFTs and more. This allows anyone to be a collector, or trade collectibles. It opens up a global marketplace to you and is transforming everything when it comes to assets.
4 Prepare for Impact
While it’s true, there are going to be big crashes happening, but there will be big waves to surf as well. In a post-covid world that gets back to business as usual, many sectors and industries are likely to thrive. Impact investing – for profit and purpose – is changing and growing. Millennials and Gen Zers are the driving force behind the conscious investor trend, motivated by their personal values. As we see the wealth transfer from Baby Boomers to their younger counterparts there is potential for exponential growth in impact investing over the next decade. All the key growth areas, like greentech and edtech, offer positive impacts on society as well as high returns. Preparing for impact is about knowing exactly what you want to be a part of, making a plan so that you know what your pathway is.
5 Speed Beats Size
Remember that it’s not about how big you are but how fast and nimble you can be to get into the right thing at the right time. It is about spotting the emerging trends and jumping in at the opportune moment. So far this year the highest returns that people are experiencing in the market are coming more from momentum stocks and meme stocks rather than traditional value investing. All the rules have changed. The biggest example of this is with GameStop which improbably saw its share price soar thanks to small investors, driven by a Reddit message board and social media. Momentum creates value.
About the Author Roger James Hamilton is a world-renowned futurist, New York Times bestselling author and co-founder of Genius School. Genius School is the world’s first global, virtual school providing a full curriculum designed to nurture entrepreneurs, artists, changemakers and global citizens. Roger is also founder and CEO of Genius Group, the world’s no.1 entrepreneur education group. Genius Group is a multi-million-dollar group of companies leading the entrepreneur movement which includes the global edtech company GeniusU, education curriculum company Entrepreneurs Institute, and Entrepreneur Resorts Limited, the world’s leading group of entrepreneur resorts and co-working spaces.