Since March 2020, when the stock markets plummeted dramatically, asset prices have risen at a similar rate. While volatility persisted in 2021, it also demonstrated that the stock market is not a one-way street and that prices do fall.
There are crucial lessons to be learned from 2020 and 2021 that new and existing investors should be aware of when they invest in 2022 and beyond.
Make sure you have an emergency fund in place and that your health and life risks are covered before the start of 2022. This will prevent you from having to use existing investments to fulfil short-term emergency demands.
Investment #1. Debt funds
Regardless of market conditions, asset allocation should be maintained at all times. Currently, under the debt fund category, variable rate bond funds can be chosen by investors for goals that are at least three years away.
Investment #2. Gold
Gold has been nearly unchanged throughout the last year. However, given the growing inflation, a 5-10% investment in one’s portfolio may be appropriate. To invest in gold, consider sovereign gold bonds rather than real gold.
Investment #3. Insurance
Check to discover whether you have enough life insurance coverage to secure your family’s aspirations in 2022. It is suggested to have at least 15 times your yearly salary in life insurance, which should be evaluated every five years. Check to see if you have enough health insurance for everyone in the family. Smaller and younger families may choose to consider family floater plans.