In the current context, returns on low-risk investments such as euro funds, savings accounts, and SICAVs are shrinking, and their interest rates are unlikely to rise in the coming months. To achieve better returns, it is wise not to rely solely on traditional financial products. To help you choose, here are the five best investments for 2018 to consider when placing your money.
1. Investing in Cryptocurrencies
Cryptocurrencies present a compelling investment opportunity today. Despite price fluctuations and volatility, professional traders still view them as a sustainable source of investment for the coming years. The rapid rise of Bitcoin from under $1,000 to over $20,000 within a single year illustrated that cryptocurrencies represent a significant and lasting technological shift.
Many experts believe Bitcoin could reach between $20,000 and $40,000 in 2018. It can therefore be advantageous to invest in cryptocurrencies before they surpass previous record levels. Other cryptocurrencies also deserve attention, notably Ethereum, which offers a platform for decentralized applications and smart contracts.
Cryptocurrencies are extremely volatile, and short-term investments can be risky. However, the underlying technology is gaining global traction, which can make a crypto allocation a solid long-term holding. Diversification within your crypto portfolio is essential. We recommend choosing a regulated broker with a wide range of leading cryptocurrencies.
For more information, see our guide on how to buy cryptocurrencies.
2. Investing in ICOs
Initial Coin Offerings (ICOs) raised more than $4 billion in 2017 and drew significant attention. This hybrid of crowdfunding and cryptocurrency appeals to startups because it enables rapid capital raising in digital currency.
ICOs can address funding gaps for early-stage projects and companies in underserved sectors. To raise funds through an ICO, a company issues tokens on its blockchain; investors purchase those tokens with cryptocurrencies in exchange for a stake or access to a product or service. The model allows many investors to fund a project simultaneously, and contributions stop automatically once the funding target is met. However, ICOs currently operate with limited regulatory oversight, so investor protection is often weak. Careful due diligence is crucial: verify the legitimacy and competence of the team behind any ICO before committing funds.
ICOs are among the top investment opportunities for 2018 alongside cryptocurrencies, but they carry higher fraud and security risks. In 2017, a notable share of ICOs were hacked, stolen from, or revealed to be scams, so exercise caution.
3. Investing in Life Insurance Policies
Life insurance policies remain a key investment option for 2018. To improve returns, favor unit-linked contracts (unités de compte) rather than relying solely on euro-denominated funds, whose yields have been declining year after year. In the early 2000s, average returns exceeded 5%; by 2016 the average had dropped to around 1.80%, and in 2017 it fell to approximately 1.50%.
Despite declining euro-fund yields, life insurance remains a solid investment when the policy includes unit-linked investments in equities. Unit-linked assets fluctuate with financial markets, which increases risk but can also enhance long-term returns. It is also important to know that life insurance policies are not only accessible upon death; many policies offer liquidity or withdrawal options under certain conditions.
4. Investing in Real Estate
Real estate consistently ranks among the best long-term investments. After an exceptional sales volume and price growth in 2017, the market was expected to stabilize in 2018 while interest rates remained relatively low. Small increases in mortgage costs and property prices were forecast, but the market remained favorable overall. Low borrowing rates support investor demand, and property assets can generate rental income while appreciating over time. Tax incentives for real estate investment can be attractive both for new developments and older properties.
5. Investing in Precious Metals and the Stock Market
Equity markets were strong in 2017 and that momentum was expected to continue into the first half of 2018. Global equities produced robust returns, and stocks continued to be favored by investors. However, selectivity is important: performance across sectors and individual stocks can diverge sharply in the second half of the year, with some names stagnating, others falling, and others rising further.
Precious metals have also shown positive dynamics and can serve as a hedge if stock markets decline. Gold and silver often benefit from market volatility and investor flight to safety, so allocating a portion of a diversified portfolio to metals can provide balance and downside protection.
Overall, considering market conditions in 2018, a diversified approach across these asset classes—cryptocurrencies, ICOs (with caution), unit-linked life insurance, real estate, equities, and precious metals—can help balance risk and potential returns.