What are the Best Investments when Interest Rates are Low?

Published here: http://goldsilverworlds.com/gold-silver-experts/best-investments-interest-rates-low/

We’re currently living through uncertain times. Interest rates are at historic lows, and this isn’t particularly good news for savers. However, this doesn’t mean that it’s impossible to expand on your savings, or that opportunities aren’t present. There are still some great investments that you can make when interest rates are low. Here are just a couple.

Property: Fixed Rate Mortgages

In spite of low interest rates, the UK property market continues to boom. Prices have been rising steadily over the past decade, and even in the wake of Brexit, few experts are suggesting that this will end any time soon. As such, property is considered to be a relatively sound investment.

However, when you purchase a property, it’s likely that you’ll need a mortgage for at least part of it. Here’s where you need to be careful. If you opt for a variable rate mortgage, then your investment could be exposed if interest rates rise (which many predict that they will). That’s why, although the rate may be slightly higher than what’s currently available, a fixed rate mortgage will be your best option. This way, you’ll be locked in to low rates and will never have to worry if the rates rise.

Gold

Gold is what’s known as a ‘safe haven’ asset. This mean that, as the world crashes around it, the commodity holds its value. This was particularly evident after the financial crash of 2008 and the UK’s Brexit announcement. As currencies and commodities all around the world lost value, gold gained it by the bucket load.

By investing in gold, you’ll be diversifying your investment portfolio and protecting yourself if some of you other investments begin to nose dive due to the economic climate. You’re unlikely to earn too much money from gold, but safeguarding yourself during uncertain economic times is vital.

Liquid Forex Markets

However, the best diversification strategy to maximise your profit at times of low interest rates is to invest in currencies as well as commodities and stocks. By diversifying your portfolio as much as possible, you stand the best chance should the tide turn against you.

You can learn how to trade forex in your own time, and there are a number of reasons why you should. The liquid nature of forex markets mean that they cannot be moved by one individual or institution, and because quotes are available in real time, it’s very much a level playing field.

Forex trading will allow you to globalise your portfolio, and means that you’re not totally reliant upon interest rates in your own country. It allows you to hedge against any political and event based risk. It’s a very risk-reward based strategy, but there’s room for fore in any balanced portfolio.

 

To conclude, some traditional investments may be less valid during times of low interest rates, but this doesn’t mean that good investment opportunities aren’t available. So examine the above opportunities and see which works best for your goals. At times like this, diversification is your best friend, so you could include all three.

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