Interest rates are up, real estate prices are stagnating, inflation stubbornly refuses to go down, cryptocurrency is in shambles, and everyone has a recession on their mind. The current economic reality is a difficult one to navigate, and if you’re an investor looking to adjust your portfolio, the whole thing can look like a minefield. Assets that paid off in the past have quickly turned toxic, while some slept-on opportunities now look like some of the most promising assets available.
Given the state of the global economy, these assets may be the ones that pull through in 2023 and beyond. If you’re looking to shake up your portfolio, these are definitely worth your consideration.
#1 Take Advantage of High Interest with GICs
After a couple of decades in the desert, GICs and other fixed-term assets have finally become viable again. Years of ultra-low interest rates meant that the returns on GICs were largely negligible. Gains from long-term GICs were largely negligible after inflation.
Rising interest rates have changed the story, and the rates from GICs have risen alongside the increase in lending costs. GICs will still have a lower ceiling on returns, but short-term GICs can provide better results with lower risks.
#2 Hedge Against Recession Fears with Gold Bullion
Recession fears have investors hunting for assets that they can count on during a recession. It’s a short list, especially with bonds having emerged from one of their worst years ever and real estate prices stagnating.
One of those assets is gold bullion. Gold has long been seen as a reliable hedge against recessions and inflation. It’s a strong alternative to both cash and equities and a safe haven for wealth during volatile times.
Canadian bullion is among the most widely recognized and easily traded in the world. Consider investment-grade products like the Canadian Gold Maple Leaf if you want to add physical gold bullion to your portfolio.
#3 Growth Stocks for Long-Term Outlooks
Short-term investors are in a tough spot this year, but if you have the patience to wait long-term, a tough stock market can be a real boon. It’s an opportunity to pick up stocks at a low price, which can mean major gains down the road.
It’s a risky strategy in the short term. High volatility means there is no knowing where stock prices will be in a few months, and the risk of a recession could put your principal in danger. However, if you’re investing for a long-term goal, the payout can be significant in years to come.
#4 Bet on Rising Rents with REITs
While residential real estate prices have stagnated, the same cannot be said of rents. The headlines may be focused on falling home prices, but rising interest rates mean mortgage costs haven’t changed much, and frustrated homebuyers are abandoning the market.
Unfortunately, when prospective buyers have nowhere to go, they stay in the rental market, which is currently facing a major shortage in major cities around North America.
Higher rental prices have become relentless, and there is no real end in sight. It may be a good time to invest in a residential REIT that focuses its portfolio on multi-family rental units.
While there is no certainty in investing, these are some of the most promising assets of the year 2023.
