The United States has been hit by a wave of layoffs, with most of the country’s major companies slashing thousands of jobs, and the United Kingdom has had to make a painful choice of whether to pay its workers more or let them go without pay.
Here are some of the top investment strategies that you should consider taking into account as you navigate the global economy, as the world’s second largest economy continues to grapple with a series of global crises.1.
Globalize your investments1.
Focus on investing in companies that make a range of products and services.
As technology and digitalisation have been the biggest drivers of the global financial crisis, companies like Uber, Airbnb, and Airbnb are increasingly attracting global attention.
You can see this in the UK’s decision to hire an Uber driver from the United States who recently had his driver’s licence revoked, while Airbnb has expanded into Australia and Germany.2.
Don’t be afraid to take risksYou’ve heard it all before: “Investing in companies where there are strong risk management tools and a willingness to take a chance are the keys to success,” says Jeremy Hill, head of global investment strategy at London-based investment bank EFG Capital.
“This means diversifying your portfolio to keep your options open.”
But the truth is, this isn’t always enough.
“Some investors may be hesitant to take risk on a global scale,” says Hill.
“If you are unsure, it’s best to go to a local fund manager or to the local authority or company you want to invest in.”3.
Look for opportunities that don’t exist2.
Look at the big picture and take into account what’s happening around the world3.
If you’re a risk-averse investor, you might be better off taking a risk with your money3.
Use a diversified portfolio4.
Focus your investments in areas that are growing5.
Take risks on a low-risk basis, rather than a high-risk oneThe UK government has announced it is raising the retirement age for the working age population from 65 to 67 for the first time, with a minimum of 25 years of employment, and has announced a plan to phase out some of its existing tax incentives for investment in housing and other infrastructure.
In the US, a group of hedge fund managers are calling for a minimum investment of $1m in every individual stock market fund.
“There are a lot of opportunities out there that don and don’t have any risk,” says Andrew Mather, managing director at mutual fund firm BlackRock.
“You can look at the market in the long-term, and think ‘why would I invest in a company that has zero risk?’
It’s probably a better idea to take your chances.”
But there are risks to investing in a sector that has grown exponentially, says Hill: “The biggest risk for the investment world is the risk of a crisis, so you can’t go out and invest in something that is going to happen and get absolutely nothing out of it,” he says.
“It’s not going to bring you back.
You have to do something, otherwise you’re just gambling.”
In the UK, where the stock market has risen by more than 300 per cent since the global economic crisis hit in 2008, investors may have to make an adjustment to investing for the future, as a number of large-scale companies are facing challenges in the financial markets and the housing market.
“The UK has a lot more than just the financial sector in the national economy and there’s a lot going on across the economy,” says Mather.
“So if you’re looking for the next big thing, look at some of these industries.”
The UK is the country where people are the biggest losers out of all of the developed world, but there are still lots of opportunities.
Investing in a range that’s growing and diversifying is a really good way to do that.