What do you plan to do with that extra money you have available? We know that stashing it under the mattress isn’t the best option. Investing through profitable financial vehicles—such as savings insurance plans or investment funds—is a far better choice. If your goal for the coming years is to grow your money and opt for safe, high-yield investments, read on to discover the best investment options for 2022.
Working with a financial advisor: the first step toward safe, profitable investments
Investing without prior knowledge or experience can lead to mistakes—errors that could be avoided if you build your wealth with the guidance of a trusted financial advisor.
Why is this so important? Essentially, because these professionals can select the financial products that best align with your return expectations and suit your risk profile.
Of course, you can invest your money on your own, but doing so with the help of an expert can help you manage the risks involved in entering the investment market.
And there’s more! If you think a financial advisor’s role is limited to simply picking highly profitable investments for you, you should know that before reaching that stage, they will have established clear objectives and calculated exactly how much money you need to reach your goal. Furthermore, they will assess the investment level and the minimum return required to achieve your financial objective.
Where should you invest in the coming months?
If you have decided that you need a financial advisor to create an investment plan and strategy, you are ready for the next step: evaluating your options before putting your money to work. At Allianz, we would like to recommend five types of secure, high-yield investments.
We cannot ignore the fact that the coronavirus crisis marked a turning point—not only in terms of public health but also regarding the economy. As for investments, the pandemic created a bearish, pessimistic climate for several months while the entire world came to a standstill to curb the virus’s spread.
Months later, and following the arrival of vaccines, the landscape is very different. Although markets will continue to depend largely on the availability, distribution, and effectiveness of COVID-19 vaccines, signs of growth are already emerging in many sectors.
Megatrends: capitalizing on trending themes to grow your money
A megatrend—or thematic investment—refers to financial products based on future global trends capable of transforming the world and significantly impacting people’s lives. Advances in biotechnology, telecommunications, and alternative energy are clear examples of sectors poised to change the global population’s lifestyle habits in the future.
One advantage of investing in megatrends is diversification: there are no geographic or market-capitalization barriers, offering ample opportunity to build a dynamic, diversified portfolio.
Real estate investments
Generating a return on a property is possible if you buy at the right time. Improvements are anticipated in the real estate sector after years of skyrocketing purchase and rental prices that reached exorbitant levels. However, due to the slowdown in activity caused by the health crisis, prices have moderated.
Buying-to-let is a profitable option, provided one fully understands market dynamics and identifies the areas generating the most interest. For instance, yields tend to be lower in secondary residence locations. While a beach property is almost certain to be rented out during the summer months, the situation changes drastically for the rest of the year. This highlights the importance of evaluating areas that offer the best potential return—though, naturally, the purchase price will be significantly higher.
Before deciding to invest in a rental property, consider the potential downsides and risks—as with any investment—such as the introduction of new rent-control regulations, adverse conditions preventing short-term tourist rentals, or scenarios involving an oversupply of properties coupled with falling demand.
Savings insurance
This investment product offers a fresh take on life insurance, allowing for the daily consolidation of a portion of the profit-sharing returns. It works very simply: first, you choose the capital you wish to invest, and then, the duration of the investment.
If this product interests you, Allianz offers access to one of Europe’s largest, most financially sound, and diversified investment portfolios. We have over €300 billion invested in assets across sectors such as public finance (sovereign debt and government bonds) and renewable energy, among others.
One of the key advantages of savings insurance is that it offers a secure and profitable investment, thanks to high solvency ratios and broad diversification.
Investing in ESG (Environmental, Social, and Corporate Governance) Funds
Is it possible to protect the planet and grow your money at the same time? The answer is yes. If you are committed to environmental protection and concerned about issues related to global warming or air pollution, this is the ideal financial vehicle for you.
Socially responsible investing (as it is also known) is ideal because, in addition to being highly profitable, it contributes to improving society. Although its origins date back to the creation of the Dow Jones Sustainability Index in 1999, it is only in recent years that it has experienced exponential growth due to increasing concern about environmental problems.
This type of investment seeks to generate returns with a future perspective. In Spain, it is possible to invest in green investment funds that select companies seeking long-term profits based on criteria that allow them to have a positive impact on the planet.
One of its main advantages is that investments can be diversified by investing in companies from different sectors that, in one way or another, help society adapt to the new environmental reality. This ensures that the investment is not penalized, as sectors like renewable energy can experience annual increases of around 20%. Interesting, isn’t it?
Stock Market Investment
One of its main advantages is that investments can be diversified by investing in companies from different sectors that, in one way or another, help society adapt to the new environmental reality. This ensures that the investment is not penalized, as sectors like renewable energy can experience annual increases of around 20%. Interesting, isn’t it?
Our final recommendation for making safe, high-yield investments is to buy stocks. When we purchase shares in a publicly traded company, we are acquiring a small stake in the business. In other words, we are—in one way or another—becoming minority owners of the company.
While this is a highly attractive investment vehicle, it also involves a degree of complexity, especially if you are unfamiliar with financial concepts. Without that knowledge, it can be very difficult to distinguish between good opportunities and those that are less promising.
The second challenge lies in building a diversified portfolio. A balanced, well-distributed portfolio should consist of companies across various geographic regions and sectors.
Conclusion
Although this is a highly attractive investment vehicle, it does come with a level of complexity. Analyze all your options, clearly define your risk profile, and take your time. Investing money you worked hard to save is a major decision; you shouldn’t make it without being well-informed and having professionals to guide you through the process. Are you ready to take the leap? Let’s get started! Allianz is here to support you every step of the way.
