All-weather investing strategies sound great in theory, but in the current bear market, most investors are hurting regardless of their prior plans. The market’s volatility is, of course, the consequence of the global financial system’s attempt to compensate for the presently destabilized macroeconomic and geopolitical situation. But, for someone looking to preserve their wealth, it’s little consolation to know that returns are poor because the conditions are unprecedented.
Pithy wealth management tips from yesteryear aren’t going to be much help, either. With interest rates rising in response to inflation, the era of nearly-free money for U.S.-based businesses is over, and it’s unclear how popular growth investing strategies might make a comeback anytime soon. Thankfully, it isn’t impossible to navigate this year’s market, provided that you have the right information and use it judiciously, so let’s take a look at which trends have the largest implications for your overall strategy.
Wealth Management Tips for The Current Market
While wealth management tips aren’t going to be the only thing your portfolio needs to flourish this year, as investing is only one subset of curating wealth, and 2022 is unique in its level of integration between general economic problems and market problems that threaten your accumulated wealth. Generally speaking, the market of 2022 is:
- Driven by genuine difficulties and distortions in the real economy
- Sharply downward-trending for stocks, bonds, commodities, derivatives, cryptocurrencies, alternative investments, and real estate
- Biased against holding cash due to a sharp uptick in inflation
Traditional safe harbors from market turbulence like properties and even artwork are not safe enough at the moment. Therefore, the most important wealth management tips pertain to hedging risks in a time when the go-to hedging assets are behaving in unpredictable ways. Even hanging onto something as simple as cash implies a significant downside due to the erosion of purchasing power being driven by monetary inflation as well as fiscal inflation and shortages of goods. Therein lies the other problem: choosing to sit still with the strategy you were using before is almost certainly going to be a losing option.
Adapt to Change
Investors need to adapt to the new high-risk environment sooner rather than later. Furthermore, the process of adaptation needs to be constant if it’s going to be effective; with so much high-impact central banking activity and so much disruption to the commodity markets occurring at the same time, missing a day or two of breaking news could be disastrous. Most people don’t have enough time to spend on keeping up with economic and market phenomena, though. In this vein, getting some help from investment firms that hire people to track those exact things is a more attractive choice than before.
Realistically, entirely human-driven and manual investing approaches aren’t going to be able to keep up with the totality of the market data and economic data coming out every day. That’s where algorithmic trading strategies enabled by machine learning systems can shine. Even if a group of human investors couldn’t figure out a graceful set of positions to take in today’s market, an automated solution might be able to.
Choose the Right AI Strategy With a Trustworthy Partner
Most investors don’t know that they can access the power of artificial intelligence-driven investing even if they don’t have much capital upfront. Likewise, most aren’t aware that their downside (and upside) exposure will be more carefully calibrated with an automated strategy than it would be with a purely human-based approach. And right now, even understanding the implications of your investing decisions is so difficult that it’s no surprise how many investors are searching for such AI-based strategies with defined risk.
Using RIMAR Capital’s hybrid model incorporating both artificial intelligence investing strategies with carefully curated human supervision is one option for investors that are scrambling for relevant wealth management tips and strategies.