Investors like me are currently looking for the best investment options for 2022. Undoubtedly, early investors get the maximum return. Therefore, now is the best time to look for top investments for 2022, in my opinion.
The year 2021 has been significantly unique in terms of investment trends. The surge in tech stocks was highly unexpected. Indeed, this sector has given a huge boost to shareholders’ wealth. Are there any such opportunities hiding in the next year? What sectors are expected to outperform in the year 2022?
Artificial intelligence is making the world smarter
Artificial Intelligence has brought a revolutionary change in the overall society. In simpler terms, AI is all about replicating human intelligence in a machine equipped with more accuracy and higher speed. That’s why I think it could be a top investment for 2022 and beyond.
Several of the blue-chip companies have been incorporating AI in their operations. Amazon’s machine learning system Rekognition, which uses AI technology, has risen to fame. It is not only being used by advertising & marketing firms but also by police forces, immigration services, and other law enforcement companies.
In addition to these blue-chip corporations, many more businesses are making AI the centre of their operations. An example is Verint, which uses AI to assist customers through intelligent virtual assistants (IVA). Another example is Aptiv which provides automotive components to equipment manufacturers. The group is using AI in the sensors required to operate an autonomous vehicle.
No doubt AI comes with unlimited advantages but be warned it has its baggage of risks. Since AI is based on the back-end algorithm, a tiny flaw could lead to disastrous results if AI is handling vital business roles. And not to forget the increased threats of cyber-attacks, which can put the entire system at risk.
The global Artificial Intelligence market is expected to hit $203bn by 2026. It is expected to grow at 33% annually as per Fortune Business Insights. Despite the risks, Artificial intelligence is amongst the top investments for 2022, I feel. That’s why I’m looking to add some AI stocks to my portfolio.
Renewable energy helping the world go green
By 2050, renewable energy will be contributing approximately half of the total global energy production, as per US Energy Information Administration. No doubt, this monumental shift requires massive investments. Hence, it is no surprise that not only new names are emerging in the renewable energy sector, but existing energy-producing companies are putting their money into it too.
A total of $28.2bn was raised on stock markets in the first half of 2021 by renewable energy companies. This marks a humungous 509% increase from the previous year. The renewable energy sector continues to be in demand and, without a doubt, is amongst my top investments for 2022.
China is leading the path of wind energy production with almost $21bn invested in the first half of 2021. Energy Production via solar power plants has also seen tremendous investments hitting a record hitting $78.9bn in the first half of 2021.
Despite being environment-friendly, renewable energy sources are still expensive. Consequently, some companies are reliant on government funding and subsidies to stay afloat, while others have amassed a substantial pile of debt. Needless to say, both can cause problems later down the line if the profit margins of renewables don’t improve over the long term.
Final thoughts on the top investments for 2022
As an investor, my goal is to make profitable investments. And while there are always risks and never a guarantee, I personally believe AI and Renewables could be some of the top-performing investments for 2022 and beyond for my portfolio.
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Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned at the time of writing. Views expressed on the companies, assets and strategies mentioned in this article are those of the writer and therefore may differ from the opinions of analysts in The Money Cog Premium services.
