If you want to learn more about popular investment trends for 2022, this article is for you. Looking back at 2021, everybody was preparing for the next economic boom and travels. It was because half of the worldwide population has been vaccinated. However, new variations of the virus, Delta and Omicron, are still causing to stop getting back to ordinary life. So what is the most popular investment trends for you this year? To find out, read the following article.
1. Gold
People worldwide, especially Americans, are paying more and more for everyday items due to inflation. Investors have turned to inflationary hedging such as gold to keep up with growing prices due to a rapid increase in the cost of living.
Due to its tendency to increase in value and inflation, investors have seen gold as a safe asset. Because of its low correlation to the stock market, gold functions as a portfolio diversifier during periods of political instability or increased volatility. Unlike stocks, gold does not provide any income for its owners.
2. Blockchain
Blockchain is a method of storing data that makes it difficult or impossible to alter, hack, or cheat. It is a technology that underlies digital currency like Bitcoin and Ethereum. In addition to cryptocurrencies, retail investors may participate in the expansion of blockchain.
Distributed Ledger Technology (DLT) decentralizes databases administered by various people. A blockchain is a digital log of duplicated transactions distributed across the blockchain’s complete network of computer systems. Each block in the chain contains several transactions. Each time a new transaction happens within it, a record of that transaction is added to the ledger of each participant.
3. Artificial intelligence
Artificial intelligence (AI) simulates human intelligence in machines programmed to think like humans, mimicking their actions. In addition, the term refers to any machine that exhibits traits associated with a human mind, such as learning and problem-solving.
The benefits of AI are tremendous, including healthcare, e-commerce, logistics, and other industries. Every organization can use AI to improve its processes and become more efficient.
Many large U.S. public companies are using AI or are looking to make investments in AI. Intuitive Surgical (ISRG), Upstart Holdings (UPST), Intel (INTC), Trimble (TRMB), and Brooks Automation (BRKS) are significant exposure to AI.
4. Space investing
According to Morgan Stanley, the global space industry’s potential income might reach $1 trillion by 2040, up from $350 billion, a 186% rise. Furthermore, possible advancements in aerospace and military, satellite-broadband internet, telecommunications, and high-speed freight delivery might catapult the sector to new heights.
5. ESG investing
ESG investing (also known as “sustainable investing” or “impact investing”) refers to investment activities that prioritize the optimal outcomes of environmental, social, and governance (ESG). Furthermore, impact investing holds a sustainability value, which means that besides considering its economic value, the investment should also consider the environment and human wellbeing.
ESG investing is not a new concept. Since centuries ago, religious and ethical beliefs have influenced investment decisions. For example, investments in Islam must comply with Shariah law. Islamic finance pays close attention to what kind of business one should invest in. This includes the prohibition of investing in interest-based businesses. Apart from its explicit prohibition, interest-based activities do not promote social justice and are detrimental to some parties.
The disruption and uncertainty caused by the global pandemic ignited a renewed interest from investors, consumers, and employees to favor those companies that prioritize environmental, social, and governance (ESG) causes. Beyond profits, these organizations have adopted a long-term view of running their business.
To read more about Islamic Finance related topics, please click here and visit our academy.
Besides, feel free to sign up for our free stock screening services at musaffa.com.