After the events of 2016 – the EU referendum result, the election of Donald Trump – it can feel like the future of investment might be very different to what we’ve been used to, and you might be feeling uncertain about where to invest. If the world is becoming more sceptical about free trade, for example, are emerging markets likely to be as strong an investment opportunity as they’ve been made out to be in the past? Or what about the rise of Fintech – is it a sound way to invest your pound, or should you be sticking to more traditional investment routes in times of uncertainty? At Crowd for Angels, we think not – and these are the investment areas which we believe you should be playing close attention to in 2017. Here’s why!
Although 2016 has left investors feeling jittery about emerging markets – the stock market turmoil in China, India’s abrupt and chaotic demonetisation process, Brazil’s political troubles – ultimately emerging markets are still dramatically outperforming markets in the developed world, and are still a contender for a good place to invest money. Just compare the S&P 500 – up 4% in 2016 – with, for example, Brazil’s Bovespa, which is up an impressive 45%. And that’s in spite of the uncertainty surrounding the impeachment and removal from office of the Brazilian president, Dilma Rousseff. If the Brazilian market was able to stay strong through that level of instability, we can expect it to continue to grow very strongly.
Or look at India – it’s true that the recent demonetisation process, which started on the 8th of November, has been shaky. When 45% of India’s GDP comes from informal, cash based work, clearly the disruption to cash was never going to be smooth. But the shift away from cash also saw a 268% year on year increase in tax revenue in November – with a less informal economy comes better tax collection. And India’s projected annual GDP growth by the end of 2016 is about 6.6% – when you contrast that with a projected growth of 2.2% in the US, it’s obvious that India is showing exceptionally strong growth.
So emerging markets look like a good place to look for at least part of your portfolio. Also, some specific currencies in developing countries look to be worth considering – do some research to make sure you’re making the right choice. And Fintech’s another attraction – investment in Fintech in Asia outstripped investment in Europe in 2016, and the sector can be a very fruitful one for investment. Wherever you decide to invest, make sure you pay attention to emerging markets – it’s where the global growth is.
Wherever you decide the best place to invest money is, diversifying your portfolio through crowdfunding is well worth considering. As well as offering you the opportunity to invest in exciting, innovative new businesses, crowdfunding offers great returns – by cutting out the middle man of a bank, crowdfunding sites can offer you higher interest rates on debt investments. And when it comes to equity investment, you could be eligible for Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) tax relief*, offering an added incentive to invest. It’s easy to diversify your investment portfolio using crowdfunding sites like Crowd for Angels – we connect you directly with pitches, giving you exciting opportunities for potentially lucrative investments.
Certain crowdfunding websites have damaged the reputation of crowdfunding overall, by being unregulated and failing to fact-check their pitches, so if you feel shaky about crowdfunding, it’s probably from reading about these sites in the papers. But Crowd for Angels is regulated by the Financial Conduct Authority (FCA), and we painstakingly fact-check all pitches featured on our website to ensure they are as accurate and transparent as possible. We actually reject up to 94% of the businesses who apply to pitch on our website, and we make the extra effort to meet our businesses in person, to make sure they stack up in real life, as well as on paper. Crowdfunding is an exciting new way to invest, which gives you complete control over who you invest in, and how – and it has the potential to be a game-changer throughout 2017 and beyond.
So in spite of the apparently dramatic changes in the political landscape in 2016 and their potential repercussions in 2017, there are still many solid investment opportunities for you to take advantage of in 2017. By using a mixture of traditional investment routes, emerging markets and high-returns investments like crowdfunding and Fintech, you can build a portfolio which is robust, and risk-resistant – so when it comes to investing come 2017, the future is still looking bright.
*The availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor and of the company concerned, and may be subject to change in the future. If you are in any doubt about the availability of any tax reliefs, or the tax treatment of your investment, you should obtain independent tax advice before proceeding with your investment.