For the world’s super-rich, ensuring that there are multiple streams of income is the first rule when looking to diversify a portfolio.
Last year, as the world came to a halt due to the unprecedented pandemic, achieving wealth diversification became a much more challenging feat than many were used to. However, despite the obstacles, the number of high net-worth individuals globally rose by 2.4 percent in 2020, most notably in regions like North America and Europe.
With the distribution of vaccines now underway in several countries, it seems like the second half of 2021 might yield far more positive results. But it seems like investors have learned from the turmoils of 2020 when it comes to building and protecting their wealth – which means always being prepared for unpredictability.
So, what are some investments that the rich are betting on in 2021?
There are some things that will never go out of style. While the value of collecting art has declined in the last year due to the lack of auctions, there are other assets that high net-worth individuals are still betting on. The Knight Frank Luxury Investment Index was topped by the exclusive Hermes handbag for the second consecutive year, followed by fine wine and classic cars.
There are a few reasons why it is important to invest in real estate: it can provide a second, third, or even fourth home to escape to when a crisis hits. The last twelve months have proven that investing in your space is highly rewarding, particularly if you are in a nation still inundated with lockdowns. There is also the potential of getting a return on your investment from your annual rental income. Other income-producing assets that are also popular amongst the wealthy are stocks and bonds.
Over the last year, cryptocurrency has hurtled into the public sphere demanding mainstream attention after witnessing the likes of Elon Musk investing heavily into Bitcoin. In 2020, crypto-assets saw a boom of 470 percent, with Bitcoin’s market value surpassing $1 trillion. While cryptocurrencies are still a largely volatile market, the rewards could be worth the risk. It is still widely unsure whether crypto is going to be the way of the future, but if it is, the time to invest, according to experts, is now.
If the pandemic has taught the world one thing, you cannot take travel for granted. For the first time since the Second World War, travel restrictions have become the new norm. Now, it does not matter if you hail from a nation with a relatively strong passport. We observed this with the decline of the US passport, which was still subjected to massive restrictions.
However, investing in second citizenship can make all the difference between being stuck in an undemocratic country that may not be handing the virus efficiently to seeing out the pandemic in an idyllic setting with far better economic opportunities. Caribbean nations, like Dominica and St Kitts and Nevis, have pioneered the concept and contributed to its evolution, making it the best region to invest in for second citizenship.