No matter how much spare cash you have to invest, making the right investment choices can be a daunting and complicated task. As an expat, you’re likely to have many factors to take into consideration, including where to invest and which financial goals to prioritise. Thankfully, many expats are in the same boat, juggling finances across multiple countries and seeking investment opportunities that can be adapted to changing needs or a combination of short- and long-term plans.
To help find the right investment for you, we’ve taken a look at 2021 expat investment trends, exploring some of the most popular opportunities that are drawing the attention of expats this year.
Real estate investment
Real estate is often seen as a traditional form of investment which can provide steady growth over a long period of time. It’s the slow nature of the returns on property investment that have made it less appealing to many modern investors, who often favour stocks and mutual funds as they seek faster gains for short-term financial goals. However, many estate agents have found that real estate remains a popular option among expats, many of whom see it as the perfect opportunity to invest across one or more countries.
For some, it provides the perfect financial base in a home country, offering the opportunity for income alongside the security of having a hub in the UK. However, there are many expats who are now looking to this classic form of investment to provide them with a combined investment opportunity that spans multiple countries and multiple goals.
For example, it is now common for expats to purchase a ‘50/50’ home in their home country and in their country of residence. One residence can be used to provide rental income while the other acts as a place of residence. In the short term, this investment option offers an instant return via rent, but in the long term it can act as a significant asset. Whether it is used as a future residence, kept as an asset to be sold or simply used as a second home, a second property can be an ideal investment choice for an expat with both short- and long-term financial goals.
No matter where you are in the world, ethical investing should be high up your list of considerations when searching for an investment opportunity. Ethical investing is usually considered to be any form of investment that has a positive impact on the world, such as supporting sustainable companies or those pushing towards a more ‘green’ way of working. Ethical investing is fast becoming one of the most popular investment choices among expats and permanent residents alike, with many investment platforms seeing ESG (environmental, social and corporate governance) investments double in the last year.
If you are looking to invest in stocks and shares, ethical options could be a good choice for you and your money. Many stocks are experiencing significant short-term gains as a result of investment in ethical or ‘green’ issues. By keeping a close eye on how firms are handling issues related to sustainability and ethics, you have the opportunity to jump on growing stocks early and potentially see great returns. As an expat, you will have your own short- and long-term goals to take into consideration, so research your options carefully before you invest any of your cash, and make sure to invest in the stocks that work best for your priorities.
Investing in technology
General investment patterns and expat investment trends collide once more when it comes to technology. This particular area has been on the up for a number of years, riding on the rapid growth of an ever-evolving industry. At the start of 2020, you’d have been forgiven for thinking the technology market may take a hit as a result of COVID-19 limiting research and development within the sector, as it did in so many others. However, global restrictions had quite the opposite effect, boosting the market as businesses and individuals alike became increasingly reliant on technology as means of working and connecting from home.
As with ethical investments, this opportunity should only be approached once you have conducted your own research based on your current finances and future goals. As an expat with potentially complex or changeable financial goals, it is important to keep your own personal finances in mind before considering any kind of stock or share investment (even those considered relatively low risk). However, if you think this path might be the right one for you, begin by researching early-stage businesses that could provide excellent short-term investments alongside long-term opportunities offering steady growth in this popular sector.
Investment in overseas markets
While many expat investment trends lean towards global or local opportunities, there is another approach to investing that could prove lucrative to an expat seeking to take advantage of growth overseas. As an expat with experience dealing with overseas markets and finance, you are in the perfect position to consider the investment opportunities that a number of developing or newly developed countries have to offer. And there are many countries that are worth considering as we begin to emerge from a year of slow and unpredictable growth.
One of the countries that is most notably drawing the attention of investors is China. Despite being at the heart of the COVID-19 outbreak, China has managed to thrive, as is reflected in the success of the Shanghai Stock Market. A number of global companies have continued to invest in China, including ExxonMobil and BMW, prompting increased interest from in many investors around the globe. In addition, a number of Chinese companies have bucked the downward trend that has plagued many other businesses around the world by taking advantage of the opportunities presented by the pandemic, including thriving social network TikTok.
Seeking out investment opportunities overseas is not always as straightforward as researching and selecting the right stock or share. In fact, if you are considering investing your finances in China or another growing nation, there are many different investment classes that can be explored. For example, you could consider real estate opportunities in cities such as Shanghai, where the growth of local companies and increase in local investment will drive house prices higher. In addition, you could consider investing in a company that is taking advantage of Chinese growth (or growth elsewhere in the world). Investment in a newly thriving country can be a sign of expansion and could result in significant returns both in the short- and long-term. Of course, as with all investments, we suggest taking the time to research any opportunities that may seem appealing to ensure they are the right choice for you and your goals.
ExpatRoute specialises in providing information and guidance to expats or future expats hoping to thrive overseas. We hope our guide on investment trends has inspired you to take a closer look at the opportunities that might work for you. However, before you make any financial commitment, we suggest contacting an independent financial advisor to receive personalised advice based on your unique financial circumstances.