For many, the investment market holds nothing but fear and trepidation at present, especially in developed economies such as the UK.
Here, the rate of inflation remains disproportionately high at 9.7%, and while this fell incrementally from the 10% mark reported in April, it continues to squeeze household incomes while driving up interest rates as part of quantitative easing measures from the Bank of England (BoE).
However, there are growth areas and economies in the UK, with regions such as East Cheshire offering an attractive proposition to both businesses and investors alike.
But what are your best investment options in 2023?
Whether you want to invest in brick and mortar assets or deal in more speculative markets, here are some options to keep in mind!
Investing in Businesses or Brick and Mortar
Whether you’re an aspiring entrepreneur or someone who simply wants to invest in local businesses, it’s important to identify high-growth regions that are able to afford your capital the best possible chance of success.
East Cheshire offers a relevant case in point, as this is a uniquely dynamic ‘knowledge’ economy with a thriving science, research and technology sector.
The region’s rich culture of innovation and vibrant R&D hub has also become influential in the healthcare sector, contributing significantly to antibiotic resistance findings and cancer drug development in recent times.
Importantly, the region has also evolved to become a local leader in the UK’s vibrant financial services sector, which was valued as high as £173.6 billion in 2021.
In terms of economic performance, the GVA per head in East Cheshire is 27.5% higher than the UK average, while more than 20,000 SMEs are currently located in the area.
This creates a vibrant small business economy and community that new entrepreneurs can join, while ensuring that investors can build a broad portfolio of local business assets.
Some 50% of the East Cheshire workforce are also employed in high-skill jobs, while a further 42% are educated to degree level.
So, local businesses can also call upon a significant pool of talent, which is a crucial factor when appraising future growth and opportunities for expansion.
Appraising Your Alternative Investment Options in 2023
In many ways, investing in businesses or brick and mortar in prosperous regions like East Cheshire may be considered especially viable in the current economic climate, as such assets provide a tangible and relatively secure store of wealth.
However, the financial market is home to a diverse array of such asset classes, while those of you who are less risk averse may also want to seek out speculative investment options. For example:
● High Yield Savings Accounts: As inflation and interest rates enjoy an inverse relationship, monetary policy usually dictates that the base rate is increased to bring the cost of living down.
This has been the case recently, with the BoE having hiked the base rate to 5.0% through a series of incremental increases since December 2021. While this is applied to mortgage and finance repayments, banks will also offer increased savings rates on specific accounts.
So, investing in a high-yield savings account can unlock improved and guaranteed returns in the current climate, while they also afford you greater control over how and when you’re able to access your funds.
● Short-term Corporate Bond Funds: Bonds are also highly secure and relatively low-risk assets in 2023, whether they’re issued by governments or corporations.
In the case of short-term corporate bond funds, these are issued to investors over a fixed period of time to help raise cash and include multiple bonds that have been packaged into a diverse fund.
Typically, such assets will have an average maturity of between one and five years, making them less vulnerable to further interest rate fluctuations than intermediate or long-term bonds.
This asset class is an excellent option for investors who prioritise cash flow, while they also provide considerable diversification (and introduce a lower level of risk) to your existing portfolio.
● Forex: Of course, market volatility and price shifts can also be leveraged by risk hungry investors, who are able to trade assets like forex speculatively and profit even in instances where valuations fall.
Scalpers can even seek incremental profits through a high volume of short-term orders that track price shifts over a matter of minutes, while forex arbitrage software also helps to identify temporary price inefficiencies that can be capitalised on.
Although this asset isn’t for everyone, it allows investors to turn market volatility to their advantage and profit without assuming ownership of the underlying financial instrument.
(image by pixabay, free to use)
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