What are the Best Investments I Can Make?
The UK economy is rightfully a cause for concern for the working population. A year of high inflation has decimated spending power for millions of households and had the effect of devaluing savings in the process. As such, more and more people are actively taking matters into their own hands and seeking more effective methods of protecting and growing their money. Investment is the chief mechanism behind growing money outside of Bank of England interest rates – but what are the best ways to invest, for the uninitiated?
Property
The first word out of any investor’s lips, when asked about the best place to protect and grow money, is invariably ‘property’. Investment in property is one of the safest forms of investment and remains so in spite of the current predictions regarding potential dips in property value. Typically, property values are robust and immune to the wider movements of the economy – acting as a safe haven for funds when times grow hard.
Before the current mortgage crisis, property was also a strong contender for inflation-beating growth in investment, as property values continued to rise considerably – with large thanks to high demand and low supply during the coronavirus pandemic. But owning property can generate wealth in more ways than one; renting out the property you own can create semi-passive income as well, bolstering long-term growth with short-term returns.
Stocks and Shares
Stocks and bonds are a more conventional form of investment, and perhaps the kind of investment that first springs to mind for many. Buying up shares in businesses on the stock market affords investors the opportunity to profit from market growth, either by investing long-term in the continued success of growing businesses or through ‘shorting’ a business and generating returns through predicting failure.
For the casual investor, seeking efficient and effective ways to grow savings in an inflation-proof manner, the best way in which to engage with this form of investment is through an investment fund. A fund tracks the movement of multiple stocks, or even an entire market, at once – diversifying investment and shielding against individual business failures or market tremors.
For the active investor seeking high reward, it is necessary to also adopt high risk. There is an argument to be made that the recession lowers risk for many, as businesses are all-but guaranteed to lose value – increasing the chance of a ‘payday’ for short investors. The recession is also a ‘discount’ opportunity for long traders, who can patiently ride out the recession and sell after the inevitable post-recession upswing.
Retirement Funds
Lastly, retirement funds may not be immediately accessible for the vast majority of investors, but they do represent one of the most effective routes to saving and growing money. By maximising your pension payments during employment, you also maximise your employer’s contributions, in so doing greatly increasing the size of your retirement nest egg.
