Investing for the Best Returns in 2023 is something to give your attention to now. You promised yourself that 2022 would be the year you became serious about saving money. You promised yourself that this would be the year you finally took the initiative to invest money in order to ensure your financial future and potentially produce some fortune. But here we are, 2022 is pretty much over, and you haven’t done much. So how about 2023?
The good news is that it’s never too late to start investing more seriously, and it doesn’t have to be difficult to get started. Here are some of the best – and most prudent – investment plans and prospects for 2023.
Investing for the Best Returns in 2023
First, Ensure You Have an Emergency Fund
Have you put money aside for a rainy day? That sum of money that every financial guru on the planet will tell you you need to get through a short-term emergency and avoid taking out high-interest loans or maxing out high-interest credit cards in order to stay afloat? The thing that many people realized they really needed during the pandemic.
Unfortunately, if you answer no, you are not alone. It is estimated that about 40% of South African adults are in the same predicament. Even AFTER a pandemic turned the world, and many people’s wallets, on their heads. So, before you invest a cent speculatively, make sure you have such a fund in place and that it is large enough to replace three months of lost income, at the very least.
This is also the money you should keep as difficult to access on a whim as possible. Put it in an interest-bearing savings account and then pretend it’s not there.
People often don’t have a rainy day fund because they don’t see how they can afford to create one. Most people, on the other hand, discover that if they sit down and honestly account for how they are currently spending their hard-earned money, they can fairly easily reduce expenditures while not suffering too much as a result.
Do you struggle with budgeting? The 50/20/30 guideline is an excellent starting point. The concept was popularized by US Senator Elizabeth Warren of Massachusetts, who is also a highly respected financial expert, and it involves dividing your earnings into three categories: 50% for living expenses, 20% for saving and investing, and 30% for personal needs (AKA fun stuff)
It’s a system that has worked for many people, particularly the younger generation, because it is less rigorous to follow and maintain than other budgeting systems and allows for a reasonable amount of discretionary spending without making you feel terrible about it.
Investing for the Best Returns in 2023
Get a Tax-advantaged Retirement Account.
If you just make one significant investing move in 2023, this should be it. It doesn’t matter how old you are. You WILL retire at some point in the future, and the better financially prepared you are for that time, the more joyful your ‘golden years’ will be.
It’s also now easier than ever to do so. Because the government recognizes that far too many South Africans are currently unprepared for retirement, it has provided opportunities for individuals of all income levels and ages to profit from some outstanding tax-advantaged retirement plans that can help them enjoy the financially secure retirement that we all really want.
Investing for the Best Returns in 2023
Invest, But Wisely
With difficult financial times ahead and the possibility of a recession, 2023 will not be an easy year for investors. Companies are dealing with rampant input cost price inflation, which is at a 40-year high, increasing energy costs, rising interest rates, and prolonged global disruption as a result of the Ukraine conflict.
However, that does not mean that the stock market, and investing in it, will be a complete no in 2023. In fact, it may offer the smaller investor some particularly good opportunities if they are sensible and consider working with a financial advisor if they are newer to the idea.
Where might these 2023 investment opportunities lie? According to many experts, all the following offer potentially great 2023 returns. Working with a financial advisor who can advise you on off-shore investing – which has also become far more accessible to the average South African over the last few years – you can look for promising opportunities globally too.
Investing for the Best Returns in 2023
Cybersecurity
According to Mordor Intelligence, the international market for cyber security was valued at $150.37 billion in 2021 and is predicted to treble to $317.02 billion by 2027. This is one of those industries that will experience great growth no matter what else happens, as the more they need money, the more hackers will do their thing.
‘Green’ Automotive Technology
It’s been slower growing than many would like, but the EV and autonomous automobile market are now picking up speed and sweeping legislation on a global scale is going to accelerate that even further.
The European Union plans to restrict the sale of new petrol and diesel automobiles by 2035, while California passed similar laws earlier this year and simple consumer fear over becoming stranded by more fuel shortages is driving greater interest in the sector too.
Healthcare
When times are tough, the healthcare sector provides investors with some protection. This is due to the fact that demand for healthcare services and medications tends to persist regardless of the situation of the economy. Furthermore, while major pharmaceutical companies may be impacted by higher cost input inflation, they typically retain substantial pricing power for their products.
Utilities
When economic circumstances are difficult, utilities can be a smart defensive industry to invest in too. This is because energy business profits and dividend payouts are relatively predictable. People still need to light, heat, and cool their homes regardless of what else is going on. It could also be an excellent way to benefit from the current high electricity rates in the UK and Europe, albeit corporations could be punished with windfall taxes.
Defense
Another area that is often a safe haven during a recession is the defense sector.
With the ongoing turmoil in Ukraine, after Russia’s incursion earlier this year, and tensions over Taiwan, many Western governments are raising defense spending. Indeed, shares of defense contractor BAE Systems have surged 34% this year due to investor interest.
Investing for the Best Returns in 2023 is completely possible seeking advice from one of our Independent Financial advisors is perhaps your fastest and safest route to gaining maximum returns on your investments.
Year End To Do and Review List