Unfortunately, there is no accurate way of predicting which investments are going to offer huge rewards, and which may prove to be unlucky decisions. Every single type of investment comes with a certain degree of risk: risk levels that vary depending on where you decide to put your money.
However, past performance can give some indication as to how different investments could be likely to perform.
Each year, Finder.com tracks seven different ways to save or invest £1,000 to establish their performance. 2021’s results reveal that higher risk options have performed the best – despite the COVID-19 pandemic.
Bitcoin takes pole position
In 2021, £1,000 invested in Bitcoin would have turned into £1,622 by the end of the year – an impressive gain, although lower than the figure of £3,919 that was seen in 2020. Bitcoin reached a record high of nearly $69,000 in November 2021 but fell in value towards the end of the year. This, say experts, is normal, with Tyrone Ross, Onramp Invest CEO, advising not to look at day to day prices, but instead to “zoom out and look at how crypto has performed the last year or two”.
Success for Tesla and Fundsmith
Of the seven investment options tracked by Finder.com, it was Tesla stock that took second place. With Tesla expected to report record earnings this January, those who invested £1,000 at the start of last year would have seen their investment increase by 36% to £1,364 by the end of the year. This year, however, there are questions over how quickly the brand can scale up production to meet demand.
The Fundsmith equity fund, which invests in well-established global companies, took third place, with £1,000 invested in January 2020 turning into £1,209 by the close of the year. One of the most popular UK investment funds – and one known for its focus on quality – Fundsmith has delivered a return of around 570% since it launched back in 2010.
Gold on the decline
The only investment of the seven that actually fell in value over the course of 2021 was gold, with a £1,000 investment at the start of 2021 worth £980.54 by the end of the year. Low rates of inflation and cryptocurrencies, say many, negatively impacted on gold prices last year. However, with inflation suggesting that gold should be much higher, some are suggesting that 2022 could be gold’s year.
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