Where to Invest your money? August 2019


Where to Invest your money?

Many of the economies of the world appear to be heading into recession as 2020 approaches. Indeed, in 2019 the news about recession appears to be getting worse.

This is an opportunity to consider which sectors or ideas are maybe worth investing in, despite any recession. What are the industries that may buck the trend or still show future growth, or those that could be considered risky and avoided. I will evaluate what current trends tell us about these industries and if it will promote or hamper the growth of that industry.

Let’s start with something a little risky but which has a great deal of interest (and newsworthy stories).

Libra

Recently it has been revealed that Facebook is preparing to release a new currency called the Libra. This soon to be implemented currency has had strong comparisons made between it and bitcoin, with the fact that its value is not fixed to another good or service, for example the US dollar or gold. While also being solely a digital currency, means it does not have a physical form leading to its value likely being affected solely by the demand and supply of the currency to the market. This could lead to the currency value being very volatile especially during economic downturns and moments of global and economic uncertainty. On the flip side of it, if bought or invested in at the end of a recession then the return can certainly justify why some investors would invest in such a risky product.

Lithium

With more and more people switching modes of transport from traditional petrol cars to more environmentally friendly electric cars and bikes. It may be worth investing in lithium mines as the switch takes place as lithium is one of the main elements added to make rechargeable batteries used in new electric cars and bikes, with the two biggest lithium miners being Australia and Chile. Expectations in Europe for the electric car market to triple in size from 2018, where only 60 models of electric cars are available to 214 models by 2021. There are also further plans within Europe to build up to 16 large lithium-ion battery plants in preparation for a growing electric car market. Electric cars are also set to be become more appealing to customers with more affordable types and more energy efficient electric cars which can last longer on the road.

However, Lithium is not only used for rechargeable batteries but also used in medical usage as well with Lithium being used as an anti-depressant to help people with depression and reduce the likeness of suicide. Lithium also has a part in nuclear physics with it being used as a fusion fuel for some military weapons.

The Takeaway Industry

Another market which is looking at expansion is the takeaway foods industry, where once again businesses within the industry expect the market to double in size from its current worth of around £7.5 billion. This comes as Dutch company takeaway.com makes an £8.4 billion bid on rival company Just Eat, last month. Some analysts are saying that the movement from traditionally eating out at restaurants to ordering a delivery from them instead is one of the biggest digitalization stories in our age.

Rare metal mining companies

The mining industry, as well is set to see growth as companies look to explore for deep see mining areas, with geologists saying that sea floor is abundant with rare materials and could even cause another gold rush. Currently companies like DeepGreen are developing new technology in order for miners to reach these extreme depths.

Who are DeepGreen? DeepGreen Metals Inc. are a Canadian company founded in 2011 who recently struck a $150 million deal with Swiss based company Allseas over deep sea pipelines in order to extract cobalt and other precious metals needed for batteries, rather than using drilling and blasts so that they are more environmentally friendly compared to other mining companies.

However, with mining moving from an already dangerous area to an even riskier area, one would expect in the first couple of decades big mining accidents and miner deaths could occur; as BP discovered in 2010 with Deep Horizon, this can lead to legal battles and loss on investments. Environmental issues must also be considered as removing rock from the ocean floor can bring instability to the ocean and further environmental damage. However, if a mining firm did find gold or other rare and valuable materials then any investment in that company would certainly make a profit.

Are there areas where you should avoid?

A company which until recently was growing at a rapid pace was Huawei, a Chinese mobile firm which has become a well-known firm globally in recent years. However, Huawei has become targeted in the political exchanges between China and the US, with the US accusing China of using Huawei for spying, while also specifically targeting Huawei with sanctions leading to services providers like google to stop cooperating with Huawei.

Travel companies

Travel companies as well are currently a bad area to invest in as politic uncertainty have caused people to become uncertain about certain travel destinations, for example the protests in Hong Kong have caused major disruption to travellers. Leaving some not able to get to their holiday location, while others were stranded in Hong Kong with no means to get back home.

This disruption has been further enhanced by recent on going strikes which have been hitting both airports and travel firms alike, with both Ryanair and British airways suffering from their piolets walking out on them over pay, although British airway piolets are currently having a vote over the newly offered improved wages.

I cannot guarantee that the companies or sectors above will be successful, or not be successful, but it will be interesting in a year from now to review what will have happened.

End of article: Where to Invest your money? August 2019

The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.

This article was published on 22 August 2019


About the Author

Alex Pearcy-Caldwell

Well-travelled and resident in two countries, Alex is studying Business Economics at University and is a general director of Aisa International s.r.o. He writes about economic data and how it impacts on investment decisions.


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