Wealth plays a very important role in everybody’s life. It is the primary thing that we all need to survive and fulfill our needs on a daily basis. Accumulation of wealth is fruitful but doesn’t give you huge benefits. The accumulated wealth is of no use if it doesn’t grow. The best way to grow your wealth by many folds is by investing it in multiple platforms. There are literally ample opportunities where you can invest your wealth such as real estate, equity, stock market, etc. Amongst all these, real estate is considered the safest option as it is least affected by the fluctuations of the market otherwise all the other options are subjected to market risks and fluctuations.
Risk mitigation has become a major concern in today’s economic environment. This is because high net worth (HNI) can lose a lot of money during a recession. Today’s environment is also changing in the middle of the unmatched challenges posed for the new investment opportunities. HNIs are considered as the prime investors of the era and if they are exposed to risks, the idea of investment is a total failure.
Given below are some key HNI investing trends that are worth considering-
Careful Investment and Increased Equity Exposure
The market prices have increased tremendously since the last decade and HNI investors are dubious about their investment. Though they are also confident about their investment and have a highly positive outcome towards investment. They continue to work with high-cap stocks and companies with positive long-term outlooks. Stocks that will benefit from the improved business activity are also potential assets. Core sustainability is becoming increasingly important in the pooling process, with a preference for high-quality stocks that trade at a reasonable price in the current market scenario.
HNIs are inclined towards fusing funds with equity, but with higher consciousness and thinking. This is very important while going for investment with security.
ETFs and Index Funds
The latest trend of HNI investment includes investing in ETFs (Exchange Traded Funds) and Index funds. An Exchange Traded Fund (ETF) is a type of security that tracks an index, sector, commodity, or another asset, but can be bought and sold on an exchange like ordinary shares. ETFs can be set up to track everything from the price of an individual commodity to a large and varied set of stocks. ETFs can also be customized to implement specific investment strategies. An “index fund” is a type of mutual fund or an ETF that tracks the performance of a market index.
PMS and AIFs
Even though many HNIs have hired personal managers for managing their portfolios. This is specially done through PMS and AIFs. PMS is a platform through which clients can manage portfolios very easily and are able to invest in equities. PMS or Portfolio Management Service. Another platform where one can invest and manage their funds is through AIFs (Alternative Investment Funds). HNIs and UHNIs are considering this valuable option for investing as well as reaping the benefits of investing. Between both the options, AIFs are considered better and are growing at a tremendous rate and this industry has gained vigorous popularity with a growth of 27% in Assets Under Management. AIFs taps into unique opportunities. They also provide great investment opportunities for HNIs like venture, unlisted markets, capital funds, long-only funds, real estate, and start-up funding, etc.
Sustainable Development Goals
The Sustainable Development Goals (SDGs) are becoming increasingly important, especially in the current pandemic, when many businesses are unable to withstand sudden systemic shocks. HNIs are increasingly committed to Social Responsible Investing (SRI) and are continuing to seek companies with strong business, social as well as governance (ESG) goals. This is a great initiative and HNIs are certainly confident about it. If SDG is strong enough then the resilience also becomes stronger and HNIs are well protected from the sudden market fluctuations.
Commercial Property Investment
Real Estate Investment is still the most sorted-out option for investment purposes. One can easily invest in the most beneficial commercial real estate property with ease. There’s no barrier for HNIs or UHNIs to invest in anything or any property. This is why investment in commercial real estate properties is considered a safe option as it allows a monthly rental yield return. Another perk of buying a commercial real estate property is that the person doesn’t have to personally care for and maintain the property. The commercial property allows the investor to get huge returns in the form of monthly rental income. The CRE property is also away from the fluctuations of the market and other risks. Every property is sure to get an increment in the cost over time. This is ultimately going to benefit the investors a lot in the long run. Another new term revolving around real estate is Fractional Property Investment where a commercial property is equally divided into several parts.
About the Author: Yield Asset
Yield Assets is one of the best commercial property investment companies that provides the best real estate investment platform. Investing in pre-leased commercial property is one of the best investments that one can rely upon.