Nearly everyone can agree that investing in their future is a good idea. Whether conventional or emerging, investments have the potential to produce a return. In short, you dedicate a specific amount of funds and make passive income by keeping your money in place. By the time you cash out, you’ve hopefully made enough of a return to make it worthwhile.
On the other side of the coin is the potential for loss. Few investments are absolutely guaranteed to make money, and some might even lose their original value. Choosing what to invest in, including industries, is often a sticking point. Using historical data and predictions helps, but so does figuring out your goals.
Timeless investments like bonds and industries made up of Fortune 500 companies can be great places to start. But emerging and unconventional industries help diversify your portfolio and may hold more potential for growth. These sectors can prove to be smart investments now and in the future. This article explores four of them.
1. Startup Firms
Many people wish they could’ve gotten in on the ground floor of some of today’s tech giants. If they had, they might have been living different lives by now. Yet, few individuals know when startups begin and what these young firms set out to achieve. Every big-name company was once an idea and a small venture that took years to build. To fuel growth, founders often use personal funds, loans, and the resources of private investors.
Getting in on the ground floor of a startup typically means direct involvement. You’re either one of the early contributors or one of the founders asks you for funding. However, that landscape is changing with alternative investments that use crowdsourcing platforms. Startup investing is now available to people who may not have the resources to fully fund an emerging firm.
With crowdsourcing technology, everyday investors can buy a piece of the startup pie. As young firms grow and expand, those smaller investments still have the potential to produce substantial income. Of course, it all depends on how well a company takes off. Startup investing, though, is a way to reap the rewards of growing businesses before they go public.
2. Artificial Intelligence
Artificial intelligence or AI is an industry that’s projected to grow substantially. By 2030, AI’s market size is expected to exceed $1,597.1 billion. The industry’s compound annual growth rate from 2022 to 2030 is also projected to be 38.1%. While you’ve probably heard of AI by now, there are many opportunities to invest in this developing technology.
That’s because artificial intelligence is touching a variety of companies and sectors. Everything from healthcare and education to retail and big data is implementing AI-driven technologies. Robot-assisted surgeries and dental procedures, self-checkout registers, and automated manufacturing processes are examples organizations already have in place.
At the same time, some companies with AI-driven products are mostly flying under the radar. These include up-and-coming firms that offer software building solutions and electronic document management services. Further examples are programs that automate power grids and cybersecurity measures across various software applications and devices. As it stands, companies that design and deliver AI-driven solutions offer growth-oriented investment opportunities.
3. Luxury Goods and Retail
It may seem counterintuitive in the face of recession woes, but sales of luxury goods are growing. Current estimates put that growth at a minimum of 5% for 2022, and that’s on the conservative end. Most of the industry’s growth comes from North American and European markets. This trend is expected to continue throughout the year, although some Asian markets also seem prime for expansion.
Luxury products that have seen the most movement are fashion apparel and accessories. Some speculate this momentum may be driven by post-pandemic returns to the office. People have a need to step up their professional attire. Plus, low unemployment rates mean some consumer segments may have more disposable income.
Investments in businesses that sell high-end fashion and accessories could prove profitable as sales continue to climb. While 5% is not an astronomical growth rate, it rivals that of more conservative investments like bonds. Buying stocks in luxury fashion and retail companies may help bolster or substitute for more conventional “safe” options.
4. Real Estate Investment Trusts
Also known as REITs, real estate investment trusts open up the possibility of investing in real estate to more people. Ordinarily, you’d have to buy a residential or commercial property and rent it out. That comes with a lot of headaches and unknowns, such as finding and qualifying tenants. Many investors simply don’t have the time to manage properties or find it feasible to pay property management companies.
REITs change this dynamic since you can invest in multiple properties without becoming a landlord. With real estate investment trusts, buildings located thousands of miles from you are now possible income sources. These trusts work somewhat like mutual funds. Your money goes directly into a collective fund that purchases various real estate. You own the share of those properties that your investment represents.
Besides not having to become a landlord, you don’t have to take out loans or make down payments. You can start investing in real estate at your own pace. REITs also let you mix up your real estate investments to offset market risks and downturns.
Deciding to invest isn’t usually the hard part. It’s determining the best investments and industries to put your money into. Goals like growth and extra income make alternatives, such as startup firms and real estate investment trusts, more attractive. Investing in industries and options like these can help you achieve your ambitions while diversifying your risks.