Where to invest in 2022- I don’t see a waterfall of money in the near future

Hello world

In a crisis, one especially wants to invest wisely and get a good return on investment. Cryptocurrencies, real estate and the stock market are the three most popular investments. Alexander Vysotsky, founder of the consulting company Visotsky Consulting, told about the advantages and disadvantages of each of them and shared the secret of where he invests money himself.

Cryptocurrency

Once you go to social networks, you immediately face a flood of information about cryptocurrency: numerous Telegram channels and Instagram-profiles tell you how great it is. Even I, though I am a business systematisation expert, am constantly being asked about investing in crypto.

Cryptocurrency is an asset that people sell and buy. Its value fluctuates depending on the circumstances.

Who should invest in crypto

I’m not saying you can’t make money on crypto. But it is a volatile asset: its value fluctuates in a very wide range. To make money on cryptocurrencies, you have to become an expert: understand how they work, learn how to predict them, understand the signals that lead to growth or decline.

For me, this area seems complicated. It is difficult to predict how real economic processes affect their value. It is clear to me that because of the material support from the US in 2020-2021, people have surplus funds that they have invested in crypto. But I don’t see a “waterfall of money” in the near future.

If you want to invest in cryptocurrency, you need to know exactly what will happen with it tomorrow. Or only focus on the opinions of experts you trust.

Cryptocurrency investing in summer 2022

The cryptocurrency market is in crisis right now – so many people who previously invested in crypto are panicking about selling their assets. But this situation doesn’t surprise me: it’s similar to the one in May 2021. Then the value of bitcoin, the main cryptocurrency, fell by half. That is why I said that more expertise is needed in this area. Because if you analyse the behaviour of the big investors in cryptocurrencies, they are not selling off assets, they are buying them up. One of the biggest private holders now has 128,000 bitcoins, 1,000 of which he has bought recently.

Real estate

Real estate looks like an attractive asset in times of crisis. The economic situation affects the market and property values drop to a minimum. Those who find themselves with cash at this point can buy real estate at half the pre-crisis prices. This was the case during the crisis in the US in 2007.

But property values have been back to 2007 levels for about 10 years.

Even if you “catch” a property at rock bottom, you’ll be waiting a long time for an increase. And some properties won’t even return in value to their pre-crisis level.
Real estate is worth investing in, but only if you are prepared for such a long payback period.

The stock market and equities

In my view, this is a more predictable asset than cryptocurrency. The value of stocks is more related to real economic processes, which means it is easier to predict. A real-life example is Netflix’s stock is down 30%. Earlier, before the annual report, they were talking about subscriber growth of 2 million, but now they are expecting a drop. Netflix has 200 million subscribers, a drop of 1%. But their share price has fallen significantly – because it is sensitive to PR and negative public sentiment.

Many people would have the idea of buying Netflix stock because its value is now at a record low.

But those in the investment community say, “It’s not worth catching a falling knife”.
After all, there’s no guarantee they’ll go up. Generally speaking, from my point of view, most stocks are highly overvalued: there are companies where the value of the stock is 80:1 in relation to the size of income. That is, the value of the stock is 80 times greater than the company’s gross revenue for the year. Therefore, the stock market and stocks also require a high degree of expertise.

I recommend investing in stocks for those who don’t have their own business: it’s a good option for managers and salaried employees with high salaries. To reduce risks, you can use the services of mutual funds. It should be understood that at best the income will be 7-8% per annum. Therefore, it is not the best way to get rich during the crisis, but rather a way to “retire”.

Investing in your own business

I will explain why I prefer to invest in my own business and projects rather than someone else’s. You have grown your business and made money from it. You know many times more about it and can anticipate changes better than in the stock market, crypto or real estate.

To me, it’s strange to make money in an area you know well and then invest it in an area where you are not an expert. Think about the return on investment from your own business.
I think it will be two or three times more than from cryptocurrencies, real estate or stocks.

Conclusion

In a crisis, all weak and poorly organised companies start to withdraw from the market. Your competitors will leave, but the needs of the market will remain.

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