Top Investments to monitor in 2022
- By FXT
- January 07, 2022
- FXT Analysis
Together with the new year’s arrival, new investment opportunities arise as well. In 2022, investors should be aware of the following key investment trends.
Indeed, there are reasons to be optimistic about crude oil supply in 2022, given the growth stories in Canada, Brazil, Kazakhstan, Norway, and Guyana, but concerns about the US supply recovery and the dangers associated with the ever-volatile Libya and Iraq linger. However, if sanctions are repealed, Iran could contribute an additional 1.4 million barrels per day of petroleum.
In the case that oil prices continue to go up, even if they do not reach the $100/b oil levels sometimes touted by market players, the motivation to invest in petroleum will be too strong to ignore. Thus, although the market expects supply to exceed demand, this might occur at a time when stockpiles, particularly strategic reserves, need to be replaced, OPEC+ spare capacity is at a low ebb, and US shale development is stalled by capital discipline. Overall, this might result in oil prices remaining at a level that reintroduces investment to its dormant condition, even among the most ecologically conscientious energy businesses.
Investments in energy in 2022 will benefit a strategy that incorporates all of the above.
For the previous two years, energy companies have been quite straightforward to buy in. When the epidemic began in 2020, energy supplies plummeted due to a record fall in demand. However, in early 2021, the US economy started to expand, and demand rose.
Mineral stocks have soared year to date as demand for minerals exceeds supply in the post-pandemic recovery. According to a World Bank analysis, gold prices, which are now at record highs, are anticipated to drop until 2030, barring a market meltdown that increases demand for gold as a safe haven. Nonetheless, the prices of other metals and minerals, including lithium and cobalt, are anticipated to grow as demand increases in the absence of major supply increases.
Mineral stockpiles are also anticipated to be impacted by the worldwide growth of Environment, Social, and Governance (ESG) standards that prioritize energy transition. According to a study conducted by S&P Global Market Intelligence, as EV demand grows, the primary difficulty for mining firms would be to balance increased demand for minerals used in EVs, such as copper, lithium, and iron, with ESG considerations to keep investors happy.
In 2021, technology stocks outperformed the wider market and lent support to the broader market. As the new year starts, a respected expert provides insight into what the sector might expect in 2022. Without any doubt, there is a lot of activity in the technology sector, which might be daunting for the typical investor. Investing in tech enterprises is also not as simple as people believe. Technology firms are continuously changing and pushing the envelope in search of the next big thing.
Currently, Apple and Facebook are competing for supremacy: Apple Inc. (NASDAQ: AAPL) is expected to be the best-performing FAANG stock in 2022, but it will have competition from Meta Platforms, Inc. (NASDAQ: FB). Investors are expected to view these two firms as the safest bets in the metaverse. Large-cap companies such as Nvidia, Inc. (NASDAQ: NVDA), Alphabet, Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG), and Microsoft Corporation (NASDAQ: MSFT) as well as pureplay quantum companies such as IonQ, Inc. (NYSE: IONQ), and Sony Group Corporation (NYSE: SONY) could capitalize on this evolving metaverse trend by recapturing some of the low-end VR gaming market in 2022.
Additionally, major vehicle manufacturers such as Volvo, BMW, Mercedes-Benz, Audi, Porsche, and Toyota are preparing to launch a wave of new electric cars in 2022. There’s no doubt that automotive industry is transiting to electric vehicles during the next decade.
Globally, the percentage of EVs is predicted to reach close to 13% in 2022, up from just over 10% in 2021, with Europe and China leading the manufacturing charge – a pattern that is likely to persist into the new year.
Understanding the risks of these investments
Risk is inherent in all investments to some extent. In finance, risks are defined as the degree of uncertainty and/or possible financial loss associated with a financial choice, such as making an investment. Investment risks often increase with time, and as a result, investors want larger returns to reward themselves for taking on more risk.
Various risks and returns are associated with the various saving and investing products. The following are some of the differences: how quickly investors can obtain their money whenever they need it, how swiftly their money will increase, and how secure their investment will be.