Trends in investing abroad post COVID-19

Diversification and the benefits of investing offshore are popular themes amongst investment experts who advise their clients to protect and grow their wealth by ensuring that they are not over-invested in any one place, fund or asset.

This is because markets, countries and industries are impacted differently at different times, and ensuring that one’s wealth is spread out helps to maintain it – and grow it.

The coronavirus pandemic has led to upheavals in markets and assets around the world, which has naturally led to investors re-evaluating their portfolios: which assets are safer than others? Where were investors hit the hardest? How are different markets responding?

Here are five things to keep top of mind as we navigate 2020.

1.  It’s still prudent to build wealth in international markets. At the core of building offshore wealth is a diversification strategy that ensures that all one’s assets are not in the same place. This means they cannot be wiped out by a single event. Instead, offshore diversification protects wealth against local currency fluctuations and other events that impact global exchanges.
2. Look for stable economies to invest in. One of the benefits of offshore investing is that investors can focus on highly regulated and established markets to invest their offshore funds. For example, Isle of Man and Jersey have a strong track record, regulatory environment and reputation. When there is global upheaval, such as during a pandemic, stable regions weather the storm and are more likely to recover.
3. Covid-19 will change the way we use technology, live and work. For investors who are interested in speculative investments, this may be a good time to research the trends that experts believe we will see following this pandemic. Some companies will solve the future challenges that the world will see as a result of coronavirus. Speak to your financial advisor before making any investment decisions, however.
4.  Focus on the long-term, instead of the short-term. 2020 is a year of upheaval, but most long-term investments will stabilise. If you do not need to withdraw investments or sell assets right now, rather leave them to recover.
5. Investigate Capital Protected Investments. Investments are generally subject to market fluctuations. If the market does well, the investment performs well and vice versa. Investments with capital protection carry a guarantee from a financial institution that the original capital invested will be fully or partially returned, even if markets fall.

 

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