1. Property
With
property prices at their lowest for many years, 2013 could be a good year to
purchase a second property and enter the rental market. There are always risks
attached to property investments: prices could fall even further or you may
find yourself saddled with problem tenants. This is not a short-term investment
but it could be extremely lucrative.
2. Stocks and shares
There
is a great deal of satisfaction to be gained from cherry-picking shares which
go on to perform well. The key to success is to diversify your shareholdings
or, if this option requires too much research, you could invest in a stock fund
and let the fund manager do the leg-work for you.
3. Stock funds
These
funds can be used to invest in a particular industry, so you can target your
investment towards newer technology companies or well-established ‘blue chip’
companies. Fund managers have the benefit of specialised financial systems,
such as those provided by APT.
4. Bonds
Bonds
are typically a lower-risk investment as you effectively lend money to the bond
issuer (normally a government or large corporation). You will receive a
guaranteed interest rate for the life of the bond plus the return of your
initial investment once the bond matures.
5. Bond funds and income funds
Instead
of choosing to buy a particular bond, you may prefer to spread the risk over a
number of different types of bond by pooling your money with other investors in
a bond or income fund. Whilst generally considered lower risk, you must be
aware of both interest rate and credit risk.
6. Gold
Whilst
gold is a commodity, it merits a special mention due to the huge demand for
gold, and the resultant increase in price. This is why so many ‘cash for gold’
type companies have appeared over the last couple of years. There is some
debate over whether or not the recent price slump is serious but it could be an
excellent time to buy.
7. The shale gas revolution
Despite
the bad press, it looks as though ‘fracking’ is set to increase throughout 2013.
Incredible as it may seem, the US could become self-sufficient in terms of
energy supply and the UK is looking to follow suit.
8. Other commodities
Investing
in commodities has become increasingly fashionable recently due to the huge
price rise for commodities such as oil and base metals. However, caution should
be exercised as the bite of the global recession can be felt in this
once-lucrative market. There are still some commodities, including meat and
water, which are extremely attractive to those looking to invest in 2013.
9. Investing in emerging markets
The
hot topic of 2012 was investment in emerging markets and this trend is set to
continue in 2013. The hub of wealth appears to be moving from West to East and
it’s worth considering investing part of your portfolio in emerging markets. To
help you decide which emerging market to pick, consult a market risk model
which will estimate risk for different asset classes within a given market.
10. Alternative investments
If
you would rather put your hard-earned cash into something more tangible then an
alternative investment may suit you. When consumer prices start to climb,
history has shown that there is money to be made from investing in artworks,
fine wines, classic cars and other luxury items that should continue to
appreciate in value.
Resources
Guardian article
explaining why would-be first time buyers are being forced to rent
London Stock
Exchange
A Wikipedia article
on emerging markets
