In this article, you can read about five of the hottest investing trends that are really worth your attention.
To state the obvious, investing is a very volatile activity that requires constant monitoring of relevant trends, however, some participants fail to find this fact evident. Quite frequently I observe inexperienced investors placing huge sums of money in long-forgotten stages of the industry, waiting for some sort of miracle that will make prices skyrocket.
It is crucial to understand that with the unstable geopolitical situation in the market, combined with the pandemic which has badly shaken the world economy, investment trends change almost monthly.
In this environment, there’s no alternative to regularly analyzing and researching a market for liquid assets to be able to obtain passive income, and not see solely negative indicators and low trends in your investment portfolio.
This is the reason why I will cover five of the hottest investing trends that are really worth your attention.
In light of the global pandemic, investors have renewed their interest in the institution and other corporations that are focused on environmental, social, and governance (ESG) issues. Beyond profits, this sector of business came to an agreement to emphasize long-term value creation rather than short-term gains.
Moreover, the stocks of ESG corporations that aim to create public value are characterized by less volatility in comparison to companies in competing fields. This collaborative solution, combined with the previously mentioned hallmark, is already successfully bearing fruit.
Throughout 2020, ESG funds in the United States increased by $51 billion in new capital, while that number only reached $5 billion back in 2018.
The motivation of investors appears to have peaked, which is confirmed by the fact that search interest in “ESG Investing” has grown by almost 330% over the course of the last five years.
It’s not just US investors who are pouring huge money into ESG corporations, as this trend has been expanding globally. For instance, European residents have brought in over $100 billion in new capital in Q1 2021.
Committed organizations are setting the pace for a better future, which is why ESG investing is a nice idea for current investments. I am convinced that such issues like reducing carbon emissions and minimizing waste will be relevant for a long time to come, so there is definitely room for growth in this area of investment.
The concept of metaverse has flooded the vast expanse of the internet. It seems that everyone is excited about the bright future of virtual worlds deprived of physical space while maintaining the ability to interact with other users. Numerous analysts forecast that metaverse investing is a huge opportunity that will pay off quickly.
These predictions are reinforced by very high-profile events like Facebook rebranding to “Meta”. Mark Zuckerberg expressed intentions to invest billions of dollars to build the comprehensive metaverse that will change the way we interact with the internet.
There are also some big exchange-traded funds that have shown excellent results among investors. For example, the Roundhill Ball Metaverse ETF possesses over $600 million in assets and an expense ratio of 0.59%. Meta and NVIDIA recently combined to make up about 17% of the fund as the two largest holdings. The thematic spectrum of holdings is quite impressive and includes cloud solutions, video games, social networks, and others.
As Co-Founder and CEO of SIDUS HEROES, which is a gaming metaverse, I also recognize great potential in this branch.
Investing in Artificial Intelligence
Thanks to the technological revolution the world has seen phenomena such as artificial intelligence. Unleashing incredible opportunities for hi-tech development, AI has the potential to influence every aspect of human lives and obtain the status of the most influential industry of the 21th century.
Take your time and look around – AI is literally everywhere nowadays. It powers Google’s search results, Apple is using the technology for facial recognition software to unlock iPhones, and it is responsible for autopilot mode in Tesla cars.
The Netflix team uses AI to create your recommendations section as well as predict which thumbnail will make you more likely to choose a particular movie. Developers around the world have been utilizing artificial intelligence to create advanced robo-advisors to optimize investments, but I will tell you about this in our next section.
UBS expects AI revenue to grow by 20% a year to $90 billion by 2025, with an average annual compound growth rate of 17.5 percent.
In my opinion, this is the golden age of investing in artificial intelligence, until this industry fully takes off.
Another fast-growing trend in investment is robo-advisors, which I mentioned previously. Automation and digitization have been encroaching on all stages of providing financial services, including financial advisory services. A robo-advisor is quite a novel tool that can be described as specifically-developed software focused on effectively managing a portfolio of investors to maximize their gains.
As a rule, robo-advisors are especially beneficial for newbie investors with modest capital, providing them with an opportunity to gain access to affordable wealth advising services.
For reference, searches for “Robo-advisor” increased by more than 6,000% during the last 10 years, while the total amount of assets under management exceeds an impressive $500 billion in the United States alone.
Taking into account that the capitalization of the wealth management market is $58 trillion, there is definitely plenty of room for growth. Furthermore, specialists’ prediction stands at $830B of robo-advisors share by the end of 2024.
This sounds really compelling since an increasing number of investors are looking for convenient ways of digital wealth management, which implies the inevitable popularity growth of robo-advisors.
To wrap up, it is hard not to mention passive investing opportunities, which involve no discretion on the part of a fund manager. Typically, passive funds keep track of a certain index or group of stocks, allowing investors to steadily earn passive income without any complicated manipulations.
Currently, a little more than half of total equity fund assets are passive, with the passive’s share of the entire US fund universe getting closer to 50% every year.
This growth can be explained by the emergence of index funds and exchange-traded funds (ETFs), which present investors with a collection of individual stocks all pooled together to bring users profit.
Even though the number of mutual funds still exceeds the number of passive funds, it is just a matter of time until they will take the leading position in the market, so it is definitely worth considering passive investing as a solid choice.
That would be everything I wanted to share with you, and I hope this article will help you to make well-informed investment decisions and make sure that your savings are working for you.
Disclaimer: The opinions and views expressed in this article are solely those of the author and are not necessarily shared by Coinspeaker. We recommend you conduct the necessary research on your own before any investment and trading move.
CEO of SIDUSHEROES.COM and NFTSTARS.APP. International entrepreneur with a global vision for innovation. Software developer. Property developer in Australia. Angel investor.