How I’m positioning my investments this tax year
22nd April 2022 15:33
by Dinah Wolf from interactive investor
As the new tax year begins, our Gen Z columnist explains her world view and how it shapes her investment behaviour in these difficult times.
Since I’ve last written for you, a lot of (rather nasty) things have happened; that’s if they weren’t already happening long before.
Inflation is out of control (understatement of the century), supply chains are under strain and globalisation has done a U-turn. Oh, yes – and Russia’s invaded Ukraine. And I haven’t mentioned the soaring cost of living (boy, am I glad I don’t own a car), all the sneaky tax hikes built into the system, plus interest rate rises.
And if this isn’t enough, the yield curve has only gone and inverted itself, although does that really say anything anymore, what with all the money printing? All in all, the world finds itself upside down. Yet again.
Beneath all this uncertainty, confusion and worry, the very best thing you can do for your portfolio (and general sanity) is to remain optimistic about the future. I think that, to a large degree, investing is a reflection of your world view and, if you take a dim view (the end is nigh), then your investments will reflect that same gloomy disposition.
If, on the other hand, you believe that good things are coming (from cures for cancer to clean energy), then you’ll be positioned for that. And boy will you be rewarded…at some point! But if all you focus on are the dark clouds hanging overhead, then your portfolio won’t be positioned to benefit from the good times when they come. Think about all the things that excite you and research them. Never stop feeding your curiosity.
Personally, what gets me super excited is blockchain tech and, by extension, Web3 and the metaverse. As such, in the coming year I’ll be stashing away stocks that cover these tech innovations.
I’m keeping an eye on Snapchat (NYSE:SNAP) (a metaverse play) and I’ll also be topping up my holdings in Augmentum Fintech (LSE:AUGM) as they have exposure to unlisted blockchain companies. Double excitement! And, while valuations for a lot of tech plays have crumbled (again, a whopper understatement), fintech really is here to stay. And it’s about to get a whole lot more interesting and disruptive. In a good way. Watch this space.
You won’t be surprised that China is (still!) on my investment radar; or maybe you will. Accounting for a little under 20% of the world’s population, China is a powerhouse that remains unloved and misunderstood. Herein lies the opportunity.
By 2049, China hopes to achieve the highly coveted ‘developed’ status, to celebrate the 100-year anniversary of the founding of the People's Republic. Expect things to get a lot more interesting from here on out.
Despite all this, we tend to allocate measly amounts of our portfolios to the region, if at all. The more you risk, the more you stand to gain. Sure, it’s riddled with what seems like never-ending regulatory woes (at one point I was down 30%) but I think the damage is grossly overestimated, as we so often do. So, I’ll continue investing in the Baillie Gifford China Growth Trust (LSE:BGCG), while keeping my fingers (and toes) firmly crossed. Hoping that someday soon, in the not-too-distant future, it’ll all sort itself out.
On a separate note, I’ve recently begun learning German on Duolingo (NASDAQ:DUOL) and I had no idea it was a listed company. That got me hooked right away. It’s completely free, easy to use and means that education is accessible to anyone anywhere. Learning languages is not a craze, it’s a necessity, and Duolingo is closing the gap, helping more people gain access to better opportunities. Because language is just that, it’s opportunity. I’m curious where this investment will take me, apart from Deutschland!
Dinah Wolf is a freelance contributor and not a direct employee of interactive investor. She is currently in her final year studying for a BSc in Finance at the prestigious Cass Business School in London.
These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided by third parties. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.
Full performance can be found on the company or index summary page on the interactive investor website. Simply click on the company's or index name highlighted in the article.
Disclosure
We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.
Please note that our article on this investment should not be considered to be a regular publication.
Details of all recommendations issued by ii during the previous 12-month period can be found here.
ii adheres to a strict code of conduct. Contributors may hold shares or have other interests in companies included in these portfolios, which could create a conflict of interests. Contributors intending to write about any financial instruments in which they have an interest are required to disclose such interest to ii and in the article itself. ii will at all times consider whether such interest impairs the objectivity of the recommendation.
In addition, individuals involved in the production of investment articles are subject to a personal account dealing restriction, which prevents them from placing a transaction in the specified instrument(s) for a period before and for five working days after such publication. This is to avoid personal interests conflicting with the interests of the recipients of those investment articles.