7 Trends to Invest in 2022
022 has been a rocky year for investors. Here’s how to take advantage, with an exploration of trends to invest in 2022 and beyond.
August 11, 2022
This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment advisor before making investment decisions.
2022 has been a rocky year for investors, to say the least. In most cases, the best investment strategy this year is to simply stick with your original plan and remain invested.
With that said, some investors are looking into new trends to invest in 2022 and beyond.
This guide will explain some of these trends, why they are popular and how to get started investing in them. As always, it’s best to consult a financial advisor before you change your investment strategy.
ESG stands for Environmental, Social, and Governance. ESG investing is a form of socially responsible investing that seeks to align a person’s investment decisions with their personal morals or beliefs.
For example, those interested in sustainable investing may choose to avoid investing in oil stocks. Those interested in ethical investing may opt to invest in companies with a commitment to a cause they believe in.
ESG investing is rapidly growing as awareness of social and environmental issues grows. Investors can buy into ESG funds, or seek out specific companies that align with their beliefs.
The “metaverse” is a new concept that combines social networking, virtual reality and augmented reality to create an interactive virtual world. The Metaverse is mostly just conceptual right now, but Bloomberg Intelligence analysts have predicted that it could be worth $800 billion by 2024.
Investing in the metaverse could mean buying stock in a company that is working on the concept or investing in cryptocurrency, NFTs and virtual land.
Web 3.0 is a concept for a new version of the internet that incorporates blockchain technology, decentralized networks and token-based economics. It’s advocated by cryptocurrency enthusiasts and technology experts alike.
Investing in Web 3.0 could mean buying stocks of companies involved in the space, or investing in cryptocurrency, NFTs and virtual land.
Series I Bonds
Series I bonds are inflation-linked bonds that pay a rate of interest similar to the current rate of inflation. Because inflation is currently very high, I Bonds are paying a very high rate of interest. Through October 2022, I Bonds will pay an interest rate of 9.62%.
NFT stands for non-fungible token. They are a type of digital asset that represents a unique piece of data stored on a blockchain network.
NFTs are unique and one-of-a-kind. You can think of them like pieces of original artwork. NFTs have been quite an investment trend throughout 2021 and 2022, with top collections fetching hundreds of thousands of dollars.
Keep in mind that NFTs are a risky investment, as are other cryptocurrency/blockchain based assets.
Here’s a tried-and-true trend that continues in 2022: investing in index funds. Increasingly, investors are buying into total market funds instead of individual stocks. These funds allow you to purchase small slices of hundreds or even thousands of companies all at once.
Index funds can spread out your bets, reducing your overall risk. And in a time like 2022, when the market has declined, it’s an attractive time to start buying.
Robo investing is a trend that has been gaining steam for several years. Robo investing platforms provide automated investing solutions to investors. Basically, robo investors can recommend pre-built investment portfolios, based on your risk tolerance and goals.
These platforms can also help investors employ advanced strategies automatically, like rebalancing and tax-loss harvesting.
Where investing fits into your financial strategy
Whether you’re following trends to invest in 2022 or sticking to your original strategy, it’s wise to zoom out and see how investing fits into your overall finances.
First off, the golden rule of investing is that you should only invest money you can afford to lose. This is particularly true of higher-risk assets, like crypto or NFTs.
This also means that investing should only be on your radar once you can comfortably cover all your regular expenses. You should also work towards growing your emergency fund.
Finally, it’s best to pay off your high-interest debt before investing. After all, that debt is costing you money — paying it off is like an instant return on your investment.
If credit card debt is holding you back, check out Tally† Tally is an app that helps qualifying applicants consolidate credit card balances into a lower-interest line of credit. Learn how Tally works here.
Once you’ve covered these basics, it’s important to ponder what you want to invest in — as well as what you want to invest for. Explore these six major savings goals for a great place to start.
While retirement savings should certainly be on your mind, retirement isn’t the only goal that you should be working towards.
Investing trends in 2022 have been all over the board — from low-risk staples like I Bonds to experimental technologies like the Metaverse. Whether you follow these trends or not, it’s always a good idea to consult a financial advisor and ensure your investments fit into your larger financial goals.
†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.