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Best Areas to Diversify Your Investments

by Olufisayo
Best Areas to Diversify Your Investments

Diversify, diversify, diversify — that’s the oldest investment advice in the book, and not only that, but perhaps the wisest, too. It wouldn’t be repeated endlessly by financial gurus and investors if it didn’t have plenty of merit behind it.

If anything, the ongoing pandemic showed the advice’s true wisdom. No asset or business sector was bullet-proof against the pandemic — but of course, some were impacted more than others.

Coming out of COVID-19 (whenever that may be), you’ll want to be diversified into a few key areas because they’re primed for long-term growth, and whose portfolio couldn’t benefit from that?

Cryptocurrency

Bitcoin and other like-minded cryptos can do a lot in 2021: it can be used on Bitcoin betting sites for casino and sports wagering, paying bills, but perhaps most important of all: increase one’s wealth drastically and quickly.

For instance, Bitcoin rose 250% from the start of 2020 to the end of it. One single coin is hovering around $35,000 US dollars in value — which has made many early Bitcoin investors overnight millionaires. What’s behind the shot-up values?

       

Well, in the United States (and several other countries), the local currency is slowly losing value as more and more money is being printed and handed out in the form of stimulus. A perfect hedge against fiat currency is, of course, crypto.

Now, we’re not saying dump all your fiat currency in favor of cryptos like many are advocating online. Not at all. However, it’s good to have some semblance of exposure to it. Again, diversity is the name of the game — which means balancing your assets accordingly so none is overweight.

Sustainable Energy Stocks

The story of the US stock market for the past year has been Tesla. It’s been on an absolute tear, reaching as high as five on list of most valuable companies in the entire world. The rally has given the corporation’s CEO Elon Musk (a giant shareholder of the company) the head-turning title of “richest man alive.”

Tesla is the face of a bigger movement, however — a shift away from oil and toward sustainable energy. Benefitting from this switch are EV companies like Tesla, but also orgs invested in solar energy, hydrogen fuel, charging stations, among others.

There’s no question the future is electric. None. After all, oil is a finite resource that will dry up one way or another. Given this situation, you’d be crazy not to have sustainability-focused investments a part of your portfolio in some capacity.

       

Precious Metals

A lot about what we said about crypto also goes for precious metals like gold and silver. It’s another hedge against falling currency rates and almost sure-fire inflation to come in the years ahead.

There’s multiple avenues to get exposure to precious metals. The most obvious one is owning physical metal, obviously. Unlike a fiat currency, this one can’t be created out of thin air by local governments.

But beyond owning a tangible asset, you can also own stocks in companies that mine the metal. Likewise, there’s exchange-traded funds (ETFs) and mutual funds that track the equity performance of the whole sector. No matter what you choose, you can’t go wrong with a good presence of precious metals in your fund.

Online Gaming Sector Stocks

By gaming, we’re talking about two separate, but similar, sectors — video games and gambling. Both have undergone a wild run since the pandemic struck, and believe us, the runway remains long for further growth.

Let’s start with video games. Perhaps no industry gained more from government stay-at-home orders than it. Even with a return to normalcy (that hopefully, involves people going outside again), the stage is set for video games. New-generation consoles are recently out and big-name tech companies (e.g. Amazon and Google) have invested in cloud gaming.

       

Then there’s online betting. Like video games, players were forced to play online (whether in sports wagering or table games like poker) rather than at their local casino. And now, that habit is ingrained to bettors, which should send this whole online sector flying upward.

While we just gave you four areas of diversity in 2021, if you do have high-performing assets in non-mentioned areas, we suggest letting them ride. As they say, “let winners run.” However, we’re confident the four sectors we pointed out will soon join them as big-ticket winners in your portfolio.

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