With 2021 nearing a close, you may already be considering what investment moves to make in the new year. Start paying attention to emerging trends, and you could be on the forefront of a runup.
When you research potential investment opportunities, consider whether you plan to make long or short-term investments. Developing your strategy ahead of your buys can help you stay on track and avoid making emotional decisions. To get you started, check out these seven trends to pay attention to in 2022.
1. Residential Real Estate in Up-and-Coming Neighborhoods
Real estate is unquestionably one of the most profitable long-term investments. With real estate, you have a tangible asset that’s always in demand — housing. Investment properties come in a wide range of prices and conditions. Depending on your appetite for executing a renovation, you could get your first property for less than you expected. Buy a property that’s ready to rent, and you could recoup your investment sooner by forgoing a revamp.
No matter your preference, selecting the right location for your investment property is essential. Research population growth data, business and amenity expansion in your target area, and social interest. Your findings can give you an idea of an area’s popularity and potential investment growth. Partner with a real estate professional to help you determine the sweet spot for affordability and profitability.
2. Cult Beauty Brands With Social Clout
Despite social distancing, beauty brands have blown up over the past two years. More screen time and the unavoidable focus on our features in video chats have opened the floodgates on beauty products. Social media, especially TikTok, has elevated the makeup and hair tutorial experience and given even novice users a platform to influence. Take a ride on the beauty and skincare rocketship that’s fueled by social media.
High-tech hair brand Olaplex saw such devotion to its proprietary bonding formula that the company went public in Sept. 2021. Many consumers have added its product as a permanent fixture in their haircare routines alongside standbys shampoo and conditioner. The brand cites plans for leveraging its scientific formulas into other categories, primarily in the neglected category of scalp care. Plans for disrupting an untapped market are key indicators for growth.
3. Hemp and CBD
The United States is slowly embracing the notion that hemp and CBD have health and wellness properties. As the marijuana-derivative products are destigmatized from their less-than-ideal roots, their market opportunity cannot be ignored.
Many consumers have avoided using these products not because of disinterest, but because of potential repercussions. If nationwide legalization occurs, more people may consider hemp and CBD products for both health and relaxation benefits. Already, early-adopting companies are seeing success with topical cosmetic products in large stores like Kohl’s and Sephora.
A solitary data breach can halt the operations of an entire city. More commonly, ransomware infiltrates a vulnerable organization, and the victims have no choice but to pay the ransom. The Wild West of cyberhackers and vigilante justice hackers must end before companies and communities’ pocketbooks and data are drained.
Tech that offers protection against potential hackers and trains teams to identify risks are worth a look. In matters of cybersecurity, there are two main vulnerabilities — systems and people. Check out companies that seek to address both, and they could give your portfolio a boost.
5. Digital-Only Banking and Finance Tools
In our increasingly cashless society, brick-and-mortar banks are becoming obsolete. In-person events are even requiring cash carriers to convert their paper money to digital payments to operate a cash-free till. Even laggards to digital finance have come around to modern payment methods in recent years.
Be on the lookout for brands that offer better customer service, products, or innovation in their space. Portability, security, and connectivity are all factors that could make an investment stand out. Consider how the company’s ideal customer would interact with its product and how it makes a difference in their lives. If it’s groundbreaking, you may want to get in on it.
6. Remote Work Tech
You can’t reclose Pandora’s box — remote work is here to stay. The teams of tomorrow are spread across the globe. Tools that make remote work easier, better, and more productive could be a win.
Powerhouse tools like Microsoft Teams and Google Workspace have led the way for connecting distributed teams. As the needs of today’s workers change, new companies will emerge. Stay on the forefront of what makes them different. Ease of use, connectability, and security are all capabilities you should examine in your research.
7. Innovative Health and Wellness Brands
Since the arrival of COVID-19, Americans are paying closer attention to their health than ever before. Many people may be inspired to take a long-overdue wellness journey. Innovative brands can offer individuals new ways of exercising, approaching nutrition, or fostering mental health. Successful offerings should focus on inclusivity, addressing underlying health issues, and providing lasting improvement opportunities.
Fad diets and quick fixes aren’t the go-to here. Consumers are smart, and many have been given a wake-up call thanks to the pandemic. Helping them understand their own health data and what actionable steps they can take to better their outcomes is paramount. This could manifest through a new tech startup or a well-established healthcare company. If this is an area of interest, read professional digests and research reports to get a pulse on what’s ahead.
Making Your Move
Now that you’ve researched some of the hottest investment trends projected for 2022, how do you make your move? First, determine how much capital you’re prepared to dedicate to this year’s buys. Identify the risks associated with the investments on your short list. Remember, all investments involve risk. Each investor will have their own unique risk tolerance, and you are no exception.
Think about your ability to tolerate and bounce back from complete losses from your investments. If a 30% temporary loss is too much to bear, consider lower-risk choices or reduce the capital you devote to higher-risk ones. As you execute your plan, check in on your earnings regularly, but try not to obsess over small dips. With a solid plan, sound research, and thoughtful execution, your 2022 investments may be your best yet.
Disclaimer: This content does not necessarily represent the views of IWB.