The pandemic and the ensuing economic recession have amplified concerns about making risky investment decisions. As entrepreneurs and investors, maximizing growth opportunities is always a priority, even in the most uncertain circumstances. Diversification of your investment portfolio is an excellent way to do that.
But, how exactly should you do it, and what assets should you invest in?
Let’s take a look at the most-invested assets, why you should reconsider, and the best investment option right now.
Usual Investment Assets Are Threatened
The first thing investors, both big and small, would prioritize are real estate and stocks, including crypto. However, while these assets are excellent for the long term, you also have to consider where you’re going in the short run.
For example, a recession will negatively affect the prices of commodities like oil and groceries. Consequently, other assets like stocks and housing will be negatively affected.
This event makes them less viable to invest in, at least for investors looking to have a steady flow of income, recession or not.
Let’s explore real estate and stocks in more detail in this section.
How the Recession Is Affecting Real Estate
Everybody knows how real estate fares during a recession. House prices will rise, loan defaults abound, and real estate prices will be unsustainable. That’s how it usually, especially from our recent experience with the Great Recession from 2007 to 2009.
But is there any difference right now due to COVID19?
The data shows there’s none. Real estate is suffering and is projected to slow down in the coming years.
Mortgage levels are consistently higher than in the pre-pandemic era, reaching as high as 5.3%. Comparatively, levels in December 2020 were only at 2.68%.
As a seller, this should be a good thing, right?
Well, not really. Even if prices are stoked by high demand and low inventory, many homebuyers are sitting on the sidelines, waiting for the prices to go down. This means it’s harder to sell a home at the moment since most homebuyers are sensitive to the prices in the housing market.
Crypto and Stocks Are Not Safe Either
So, why not invest in stocks and crypto?
Like real estate, these assets are long-term in nature, meaning you have to ride out the storm before seeing any returns. If you have the capital to do that, then feel free to invest in them.
However, most investors don’t have that luxury.
For crypto and stock traders, the outlook doesn’t look so good. For instance, cryptocurrencies like the Ether and Bitcoin plunged big time recently. According to one analyst, Etherium will further go down to USD700-800.
Bitcoin, the most famous crypto, will also be at a new low of $13,000.
Currently, the stock market is projected to crash by another 20% if the US enters a recession. Similarly, S&P could further dip by 23%.
What Does This All Mean?
These are just recent data, but they all reflect a trend that these assets go to when there’s a recession: unreliable and risky.
It’s critical to find resilient assets and bring income even with a recession.
One such asset is an online business or eCommerce.
The growing trend of enterprises transitioning online signals that this is the future of investment and that you should dip your resources into them.
Why E-Commerce Is a Viable Investment Option Right Now
During the pandemic, many businesses closed because of the lack of foot traffic in their physical stores. To adapt, eCommerce grew in popularity to keep their income streams stable.
ECommerce is excellent at ensuring a steady flow of income in the short run and as a long-term asset for your business.
These are three reasons why you should do the same and invest in building your eCommerce business:
Stays Open No Matter the Situation
As we said, eCommerce stores can stay open, even if your city is locked down. And this is not only limited to the pandemic era. Even before, entrepreneurs have leveraged online channels to sell their products.
Now that most people can’t go out of their homes or discover the wonders of online shopping, they’re currently using E-Commerce now more than ever.
And you don’t have to worry about store hours since you can program your stores to serve customers 24/7.
That’s a great way to boost sales even if you’re not operating your business.
In fact, 14.1% of retail purchases are done online, with over 1.92 billion buyers surfing eCommerce stores today. Retail purchases are projected to grow even further to 24.5% by 2025.
If you’re looking for the best eCommerce platforms, you should try out Amazon and Walmart. They have the best presence in the market and are typically preferred by online shoppers. To illustrate. Amazon has a 56.7% market share of US eCommerce sales, while Walmart is steadily increasing its sales.
It Is the Future of Shopping
E-Commerce is thriving. Retail eCommerce, in particular, is showing more than promising signs of growth. In 2014., this market segment was only valued at USD1.3 trillion. In 2021, the value rose to a whopping USD4.5 trillion.
As we said, most people are growing fonder of online shopping, which is also reflected in retail. 56.9% of clothing purchases are made through eCommerce stores, and studies show that it’ll only increase in the coming years.
And it’s not a shocker since online businesses can position themselves in multiple ways instead of just one point of sale in a single physical store.
Moreover, E-Commerce stores are the preferred mode of shopping by millennials. According to Statista, a whopping 67% of millennials prefer shopping online than anywhere else.
E-Commerce is slowly becoming the market in that everyone should have a presence.
This is even though there are slowdowns in other sectors such as real estate and crypto trading. If there’s a resilient sector that wants to invest in, eCommerce is an excellent choice. It’s where people with the power to buy are going into.
You Can Easily Measure Your Performance
Being an investor is tricky. You need to know several relevant information first before making an investment decision. This is the reason why eCommerce is such an excellent option.
E-Commerce gives owners and investors ample opportunity to measure the success of their investments. And you can easily track them down with relevant software that eCommerce platforms like Amazon and Walmart readily provide.
Some metrics you should look out for are:
Number of purchases
Times a product is viewed
Payment methods used
Unlike most investment assets, eCommerce metrics are easily accessible wherever you go.
You can just log in to your platform’s dashboard and see how your store performs.
Other investments don’t have this convenience.
Most of the time, you’ll have to rely on market reports that take weeks to finish, which can severely delay making timely investment decisions in your portfolio.
Invest in E-Commerce With Ascend Today
Are you ready to diversify your investment portfolio?
With a slowing economy and volatility of real estate, crypto, and stock trading, it’s recommended to look for alternative investment options.
These options will bring in the much-needed additional income streams that will get you by even in a recession.
Building your own Amazon and Walmart stores have never been this easy! At Ascend, we promise a high level of partnership experience.
Schedule a call with us, and we’ll happily help you start your eCommerce investment journey.