Anyone who has a tidy little sum of money on the high side today has a problem. Switzerland has negative interest rates, while the EU has zero interest rates. Building up assets in this environment is not so easy. Especially for those who earn a high income and accordingly have plenty of unused capital lying around. They usually rely on a professional to take care of investment selection. Such experts then engage in active asset management by diversifying among countless financial products. In this field, a few things have changed in recent years. We show which ones and take a look at current trends that have emerged, especially in the digital sphere.
Classic asset management
Every business-minded person knows that you should not put all your eggs in one basket, because the risk of total loss is then too great. Therefore, classic asset management consisted of putting together a mix between different types of investments where one could expect solid growth. Most of it was stocks, funds, real estate, bonds and commodities. In the case of commodities, it was predominantly precious metals, but oil, copper and a few more were also considered reliable sources of return.
If you wanted to get a little wilder, you could ask your asset manager to add a few warrants to your portfolio. Possibly also some CFD’s or other certificates and leverage products.
There is really nothing wrong with these investments, as they have proven to be excellent over many decades. However, investors can encourage their asset manager to use other options. These have only emerged in recent years as a result of the Internet and digital advances, and they make for good business.
New trends in asset management
Independent asset managers, such as the experts at Wealth Management Basel, are untethered from financial institutions. They can buy and sell whatever they want. The good thing for you as a client is that you can tell them your wishes for investment forms, which they will then implement professionally. This becomes particularly interesting with these products:
Bitcoin & Cryptocurrencies
With Bitcoin, so many citizens have become rich within a short time in recent years. Cryptocurrencies in general are growing strongly. They used to be a means for criminals to conduct their business or for technical nerds to play around with. Now, they are an investment product that is catching on with the masses.
Yes, they still exist the interest rates. Everyone who takes out a loan feels nothing about low rates. Interest rates on loans are insanely high with banks because they maintain a gigantic infrastructure. Therefore, resourceful portals have seen the opportunity and built a market where investors and borrowers arrange to do business without the banks. It’s called peer-to-peer lending. If you invest some of your assets there, you can relatively safely expect 5-10% interest in the current climate. It’s pretty easy money to make because you’re spreading your money across thousands of borrowers with the click of a button.
There are financial experts who have studied charts with artificial intelligence and derived rules from them when to buy and when to sell. They have incorporated these rules into software and given it the task of managing a portfolio. Some such “robots” achieve excellent returns. This is possible because a machine acts completely unemotionally and simply implements the rules. Investors, on the other hand, tend to make mistakes triggered by sentimentality. One can confidently leave a part of one’s own money here. The results are sometimes really good – depending on the provider.