Building wealth over time requires careful consideration of your investment options. Of course, market volatility, new technologies, and vague financial predictions that range from another Great Recession to a booming economy within a few months all make it challenging to choose the right path forward.
The good news is that there are ways to build your wealth while mitigating risk and boosting the potential for return on your investment (ROI).
In this post, we will explore your options when it comes to 2022 investments worth considering if you’re seeking long-term wealth building and performance. We will also discuss the role that a digital security trading platform should play in your investing, as well as why you should go the digital route rather than the conventional retail investing route.
What Is a Digital Securities Exchange?
Before we dive into the discussion of investments to make in 2022 for long-term growth and performance, let’s first establish what a digital securities exchange is and why you should use this trading platform rather than something else.
A digital securities exchange is nothing more than a securities trading platform for digitized financial products. Digital securities are also called tokenized securities, or security tokens, and are nothing more than financial securities that have been digitally represented on a blockchain, which is the technology underpinning the cryptocurrency industry (as well as a growing number of other industries).
Why should you consider using a securities trading platform instead of going the more traditional route, whether that’s working with a broker or DIY investing through an app or user interface? Simply put, digital securities can offer all types of assets, including access to nontraditional options, such as contracts and cryptocurrency.
2022 Investments for Long-Term Success
Now that we’ve learned a bit more about digital securities and why you should consider a digital trading platform, it’s time to turn our attention to the suggestions for 2022 investments to play for the long term. Where should you put your money? What are the choices that offer a good mix of return and mitigated risk?
1. Growth Stocks
First, we’re going to consider one of the most traditional investment options – growth stocks. With the right digital securities exchange, stocks can be bought and sold with ease, including high-growth, high-ROI options.
Of course, that growth comes with higher-than-usual risk, so if you cannot afford to part with your investment money, it might be wiser to build your financial situation first or put your money into bonds or another low-risk, a low-yield investment vehicle.
While growth stocks do come with increased risks, they have proven to be some of the top performers over time. And since we’re talking about long-term investments, that is the type of performance you want to see. Not flash-in-the-pan success, not day trading-style – long-term, proven success over time.
If you intend to go this route, you’ll need more than just a decent amount of financial savvy. You’ll need to be prepared to put in the work and analyze each stock you consider buying.
2. Stock Funds
Going the growth stock route requires a significant investment of time and energy. If that’s a little more than you’re willing to commit, consider stock funds, instead. You can do this as either an ETF or a mutual fund, and you can put your capital into a broadly-diversified fund, including Nasdaq-100 and S&P 500 funds.
Why consider stock funds? They offer the chance to buy into growth stocks, but with an experienced hand at the helm. It eliminates the time and energy required to investigate and choose the stocks yourself while offering a similar reward versus risk scenario.
You also hedge your bets because you’ll get the weighted average return of every company within the fund, which reduces volatility and helps hedge you against potential losses.
With that being said, it’s possible to buy into narrowly focused funds. These offer less diversity and therefore less protection against volatility. Make sure your risk tolerance is high if this is the route you choose.
3. Real Estate
Perhaps the most traditional long-term investment in the world, real estate is always a good option for your portfolio, digital or otherwise. With the right trading platform, you can buy, sell, and hold real estate of all types, from residential properties to fractional ownership in commercial properties, such as multi-family and apartment complexes.
Why real estate, though? Those looking at the current real estate market and remembering what happened in 2008 with the onset of the Great Recession might be wondering if buying any type of real estate is really a good idea for the long-term. Again, there is risk involved in all investing, and real estate is no exception.
With that being said, the predictable cyclical nature of real estate means that no investment will be worth anything. And property values tend to rise over time, even if they fluctuate between highs and lows.
Combine that cyclical nature with the potential for ongoing value increases and historically low-interest rates and you have a recipe for success.
4. Small-Cap Stocks
Want to get in on the next Amazon before it becomes a massive juggernaut? Small-cap stocks are the route to go. You’ll find that these are often high-growth stocks, but not in all cases.
Small-cap stocks are essentially small companies that have yet to make their mark on the industry but have enormous potential to do so. At one point, Microsoft, Apple, and Amazon were all small-cap stocks.
Of course, the more potential there is for growth, the more you’ll pay for these stocks. There is also the risk that the company will not perform as expected, or that it will fail outright. Think of Theranos here – perhaps the best illustration of both a high-growth and small-cap stock that ultimately failed to deliver much of anything to investors.
Cryptocurrency is another high-volatility, high-return investment option. Bitcoin and other cryptos have made headlines for their gains in recent years, and it can be tempting to add these to your portfolio. However, not all crypto coins are worth your time, and not all are suitable for long-term investments.
For those considering cryptocurrency as an investment option, stick with mainstream coins like Bitcoin and avoid altcoins. Altcoins can be worthwhile investments but are not well-suited to deliver long-term gains. They’re better bought and sold very quickly due to their extreme volatility.
In the end, these are just some of the investment areas you should consider in 2022 if you’re looking for long-term performance and a store of value. Other options available include target-date funds, dividend stocks, value stocks, and bond funds, although some do not offer high growth/high-return capabilities.
However, don’t neglect your securities trading platform. With a digital securities exchange like INX, you can invest in securities registered with the SEC and build your wealth over time.
Digital securities offer a wide range of benefits and are well-suited to helping individuals build wealth over time, as well as for businesses seeking to raise venture capital through security token offerings (STOs). With the right trading platforms, businesses can attract individual investors, as well as VC firms and institutional investors from around the world.