Discover the best investments for 2022 and why the smart money and super wealthy are investing heavily in the asset classes we’ve highlighted below…
The Covid situation of the past few years has already changed the world dramatically. However, the long-term effects on both society and the world economy are not yet clear. While none of us have a crystal ball, inflation looks likely to be a big issue, both in the U.S. and internationally. This has been brewing for a while, but was always strongly denied by Jerome Powell, chairman of the Fed. Powell always insisted that inflation was transitory, but has finally admitted that it is now a cause for concern. The super-wealthy certainly think so, and they’re positioning themselves accordingly.
In this article we look at some of the best investments for 2022, and it should be no surprise to learn they’re all inflation proof.
Inflation Proof Investments
Rising inflation rates and the threat of hyper-inflation is one of the big financial talking points of 2022. Inflation is a double-edged sword that has the potential to hit rich and poor, alike.
Rich people who have their money in bank accounts will find the real value of their savings decimated by inflation. People who don’t have savings will find their purchasing power decreases thanks to rising costs of commodities, goods and services.
In short, finding inflation proof investments is what the smart money is doing, right now.
Truffle Producing Trees
The wealthiest people in society have always invested in forestry and tend to increase their exposure during times of market uncertainty. This is because forestry investments are isolated from the financial markets. Whatever happens with the global economy, trees will keep on growing.
Truffle producing trees have some big advantages over traditional forestry investments, which we believe, makes them the best green investment on the market.
Firstly, with truffle producing trees you’re not purchasing normal trees. You’re getting trees whose roots have been inoculated with Périgord Black Truffles, one of the world’s most expensive foods. The unique high value and demand of these truffles allow truffle producing trees to provide a return on investment that you can’t find in any other forestry investment.
Truffle producing trees also have a much lower entry point than other forestry investments. A typical timber investment can start at anything from $100,000 to $1,000,000. Fine for the super wealthy, but not much good for the rest of us.
Another advantage truffle producing trees have over timber-based forestry is the timeframe for returns. Timber investments usually take at least 25 years to start earning returns, sometimes longer if the market conditions aren’t right for selling. An investment in truffle producing trees starts producing returns after just three years and will keep on providing annual returns for up to 30 years.
For these reasons, we believe that anyone considering making a forestry investment should seriously consider truffle producing trees.
ISO 20022 Compliant Cryptocurrencies
ISO 20022 is the industry standard for sending electronic messages between banks and other financial institutions.
For years, banks have used SWIFT for international payments, but that system, which dates to the 1970s is out of date. Sending an international payment through swift can take up to 5 days. In an age where information can travel via internet and email in seconds, it’s crazy that money doesn’t have the same capability.
ISO 20022 has been testing some cryptocurrencies with a view to possibly using them to replace SWIFT.
Cryptocurrencies such as Bitcoin have been used to diversify portfolios for several years but have traditionally existed outside of the financial system. Thanks to ISO20022 some cryptocurrencies look set to play a part in the future of international payments.
Meme coins like Doge should be treated with caution, but coins with utility and a use case, could do well in 2022.
Buying real estate, whether residential or commercial is a good way to hedge against inflation. This is because it’s another asset class that usually has little to do with the financial markets. In uncertain times, a diversified portfolio is a good way to protect your wealth and real estate is a popular option.
The real estate market is heating up during 2022 and that is likely to continue as the year progresses. As inflation increases, it gets harder for new buyers to get onto the property market. This increases the demand for rentals, which is good news for landlords.
Rising real estate prices also mean that buyers can expect a quick appreciation on their investments. Similarly, rent will rise along with inflation, so make sure you keep rental contracts short term. On the other hand, mortgage payments stay the same for the duration of the mortgage. Rising inflation rates mean that the money used to pay off your mortgage has less value.
A potential drawback is that buying real estate can be expensive. If you want to increase your exposure to real estate, but on a budget, consider investing in an REIT (Real Estate Investment Trust). These companies invest in different real estate opportunities, and you can buy shares of the company. This has the advantage of being fully managed, so you don’t have to commit any time or effort into looking after the property or dealing with property management firms or tenants.
Buying real estate overseas will give your portfolio a further level of diversification.
While gold isn’t likely to generate the returns of the investments above, putting a small part of your portfolio in gold is a popular way to hedge. Gold is a long-term investment and tends to under perform when the market is doing well.
But when things are going badly, gold starts to shine. During the 2008 recession gold prices rose while the stock markets tumbled.
Most investors counsel against having a large allocation of gold in your portfolio, but during uncertain times it’s prudent to have a small part of your portfolio to this versatile precious metal.
With inflation knocking on the door, and the Fed raising rates as soon as March, the time to act is now. We believe that our truffle producing trees are the best green investment and inflation hedge out there. Download our free membership pack to learn more and don’t hesitate to contact us if you have any questions. We’re here to help you navigate 2022 and beyond.