If one of your New Year’s resolutions is to shore up your financial future by bolstering your investment portfolio, brace yourself for good news. We’ve spoken with experts and culled a list of the top four investing trends projected for 2014. Determining which investments make the most financial sense and have the potential for the greatest return can be daunting, so we’ve eliminated the guesswork.
Here’s to a happy and prosperous New Year!
Attention Zuckerberg-wannabes: Pending updates to the JOBS (Jumpstart Our Business Startups) Act will mean that you, too, can profit from the next big startup. “Currently, only accredited investors are allowed to invest in startups,” says Sang Lee, founder and CEO of Return on Change, a crowdfunding platform for socially conscious startups. “Some of the guidelines of being an accredited investor are making over $200,000 in annual salary and/or having a net worth over $1 million dollars, excluding the value of their first home.”
Now, though, the SEC is finalizing the rules and regulations of Title III of the JOBS Act, which will allow the general public to invest in startups in exchange for equity. It’s expected to pass in early- to mid-2014, says Lee.
Lee also has advice for those who want to jump in on this trend. “Crowdinvesting should be considered exactly like angel investing; it is risky and does require significant due diligence,” says Lee. “Additionally, investors should only allocate a small portion of their investments to crowdinvesting, and those investments should not be concentrated, but rather spread through 15-20 investments in order to ensure a higher likelihood of success.” To get started, visit sites like Return on Change, EquityNet or CircleUp.
Gold and Silver
Though the hype around gold and silver has begun to dissipate and prices have continued to fall (making a quick return on investment unlikely)—Josh McCleary, COO of SilverSaver, believes that this as good a time as any for individuals to invest in precious metals. “Anyone, regardless of income, can now accumulate and diversify into physical gold and silver,” McCleary says. “New technologies have lowered the barrier of entry and reduced risk for diversifying into an asset class with thousands of years of history.”
Because of the government’s trend toward unlimited debt creation and the constant printing of money, says McCleary, everyone should consider owning physical assets that protect purchasing power long-term. The fact that prices are relatively low now is just an added bonus.
“Look at any chart that shows what the value of currencies have done, and you can quickly see that having some silver and gold protects purchasing power,” he explains. “The example we always give is two 1964 dimes. At the time they bought a gallon of gas, and their value still buys a gallon of gas today because they are 90% silver—so they’re each worth about $1.50.” For more information or to buy in (with a $25 purchase minimum), visit SilverSaver.com.
Social Impact Investing
If you’re unhappy with multinational conglomerates that squeeze pennies from communities with little regard to how individuals are impacted, this is your year to invest in startups that are making a positive difference.
“More and more investors, especially millennial investors, not only want to see a financial rate of return, but a social rate of return,” says Judd Hollas, founder and chief inventor of EquityNet. “As such, investors are interested in investing in for-profit companies that are driving social, environmental or green technology change.”
Lee agrees. “This form of investing has been gaining a lot of traction in the last 6 to 8 years, and it will become an even greater trend in 2014,” he says. “We as investors should be wary of where our investments go, as they have an effect on our environment, society and the world at whole.”
If you’re interested in making your money work for the greater good, try investing in funds like Omidyar Network or Acumen, that then disperse resources to other organizations. Or you can invest directly with the individuals or startups that interest you by visiting platforms like Kiva or Return on Change.
With sites like LendingClub and Prosper exploding in popularity and allowing average Americans to grant interest-bearing, money-making loans to total strangers, peer-to-peer lending is sure to continue to be a hot trend in the new year.
“Providers have seen huge growth in the last year,” says Phillip Parker of CardPaymentOptions. “For instance, LendingClub started in 2013 by issuing $1.2 billion in loans in the month of January. The company has more then doubled its volume within 11 months by issuing over $3 billion in November. Even more impressive is that December’s loan volume has already beat November’s.”
With no affiliation to either company, Parker can vouch for the platform because he’s a satisfied investor. “Personally, I have been investing with LendingClub for over four years and have seen an average APY of over 10 percent year-over-year,” says Parker. “As far as I know, there is no other investment option that has such a substantial return for the level of risk associated with it.”