For many businesses it’s an exciting time. The global economy is finally back on its feet. Orders are coming in from local and global markets. And record profits are being made.
It means that many businesses now have a lot of surplus capital. Heck, just look at how much money Apple has in the bank right now.
If your business is building up capital, how should you put that capital to work?
The economy is a complex system. And, as a result, it’s hard to predict exactly where it will go in any particular month. Though economists may try to predict the future, their models and predictions are abysmal. And they’re usually wrong.
One way to protect your business against that uncertainty is to invest in metals. Precious metals, like silver and gold, have always been a hedge against inflation. And given that global inflation is a big risk today, these metals have risen in price over the last couple of decades. Consider allocating a chunk of your portfolio to precious metals; perhaps 10 percent.
Into Real Estate
Big real estate developments, like The Peak apartments, are part of a much wider trend. They’re being driven by year-by-year global real estate price rises. Just as in the early 2000s, real estate is becoming an exciting investment opportunity once again.
By Metropolitan Transportation Authority of the State of New York [CC BY 2.0], via Wikimedia Commons
It seems that we’re now at the stage where the last crisis is passing into memory and investors are once again focused on the fundamentals. They see that factors like globalisation and low-interest rates are driving real estate prices higher. And, because of this, they see an opportunity to make a return.
Into Tech Companies
Investors have been wary of tech stocks since the Dotcom boom of the late 1990s. Many investors learned their lessons from that crisis and more cautious technology stocks.
But should they be? The Dotcom boom was essentially about bad timing. Yes stocks were overvalued. But if you look at the grand sweep of history, they weren’t overvalued by much. In fact, now that the internet is flourishing, many businesses would love the opportunity to go back and invest in certain tech startups.
We’re at a similar point today with a new crop of tech companies. Investors are cautious about new technologies, like 3D printing, because of fears over a new bubble. But there’s no doubt that these technologies will produce industries that will pay dividends in the future. It’s just a matter of timing.
As the global population expands, more and more pressure is going to be put on food. At the same time, as countries get richer, fewer people will be producing it. This means that they’re going to have to increase their productivity enormously. However, they’re only going to be able to do this with additional investment in machinery. And this is where the investment opportunity lies for businesses. Millions of farmers are going to need capital to farm their crops more efficiently. And when they do, they’re going to make a lot of money and create returns for investors.