5 Reasons Why You Should Invest in Leisure

 

Why You Should Invest in Leisure

Along with making resolutions, many investors also look for emerging opportunities in the new year. However, one industry that has grabbed people’s attention is leisure and recreation services. Not only have businesses in this sector shown significant increases, but there are diverse investment options since it includes a wide array of interests such as sports, media, art, travel, etc. Although it’s had a history of rises and falls, the current trend has shown continual growth. Demand for new types of leisure and entertainment has grown during the pandemic, leading to new innovations, technology, and business models. And, it is attracting a lot of attention from important investors due to the ample business opportunities. If you have an innovative idea or have a business you would like to invest in, here are 5 reasons why you should invest in leisure.

What Does Leisure Include

The broad definition of “leisure” applies to any activity done when not working. When it comes to investing, the leisure industry is the market sector that focuses on entertainment, recreation, tourism, and sports. As you can probably guess, there are multitudes of businesses that fall under this category. And, there are more popping up every day as technology advances and the sector continues to evolve.

But, how does what you do in your free time apply to investing? All you have to do is look around your community. There are leisure and entertainment venues everywhere. Traditional leisure venues include retail stores, restaurants, bars, health clubs, sports complexes, movie theaters, amusement parks, casinos, and concert halls, just to name a few.

For conservative types, there are well-established stocks in airlines, hotels, and theme parks that have a strong performance history. However, there are also several gaming companies, streaming services, and social media platforms that also promise good returns on your investment. And, there are new entertainment options introduced to the market every day. Thanks to the internet and trading apps, the market is even more accessible to investors.

Reasons Why You Should Invest in Leisure

When choosing a sector, you’re probably asking yourself which ones are projected to see the most gains. There are endless strategies and theories out there. However, here are 5 tangible reasons why you should invest in leisure.

1. The Leisure and Recreational Services Industry currently ranks in the top 27% of all industries.

 

As any sound financial advisor will tell you, do your due diligence. You should always evaluate past and current market performance before you buy into any stock. Luckily for those who are short on time, online resources like Zacks compile and compare the most recent data for you.

According to their analysis, stocks in this sector are expected to outperform the market in the next 3-6 months. They also provide a convenient list of their top-ranked stocks. Resources like this make it easier to come to a decision, especially when picking individual stocks. It also shows which markets currently attract the most consumers for those interested in new ventures.

2. Analysts expect leisure stocks to see a significant rebound.

 

With the outbreak of Covid-19 and the ensuing pandemic, the entire stock market has taken a dive. Undoubtedly, the leisure travel industry was one of the hardest hit. As businesses closed and social distancing measures were enforced, stock prices continued to plummet. But, there is hope on the horizon as businesses re-open and adapt to the new normal. Although the spread of the latest variant threatens to cause another sharp decline, analysts expect leisure spending to double by 2030.

People have become restless being cooped up, and are looking for entertainment outlets. While we have been sitting at home, many of us have also managed to build our savings. The Bureau of Economics reported that the average personal savings hit a record high of 33.7% back in April 2020. Then, March 2021 showed an additional increase of 27.7%. This bodes well for the leisure and recreational services industry.

3. The world’s population is getting richer.

 

As Engel’s Law indicates, when a person’s income increases, they spend less on basic necessities and more money on other goods. Despite recent economic hardships, the world’s population has never been wealthier. Of course, there are large variations between different countries and individual households. But, people today have more expendable wealth than ever before.

The most difficult question to answer is how people are going to spend their discretionary funds. However, there will always be the human need for recreation and entertainment. Therefore, it isn’t unreasonable to assume that the more people earn, the more likely they are to spend their extra money on leisure.

4. The industry offers diverse investment options.

 

When you look at the entertainment industry, it includes a wide range of businesses and services. This diversity is one of the most attractive features of this sector. Not only does it encompass all the businesses who provide services, but also those which cater to the needs of the customers spending money on entertainment and recreation services. New businesses that can meet these needs the fastest and most efficiently will see the most success.

With the myriad of investment options, leisure-focused ETFs are a great way to help your portfolio gain exposure to this market. These ETFs offer baskets of leisure stocks, mitigating the risks of choosing individual stocks. Meanwhile, you also get a random sampling and can gauge which companies have the potential to yield a higher return.

5. Leisure businesses have been quicker to adapt.

 

Since fewer people are frequenting public places, leisure businesses have to adapt quickly in order to survive. Therefore, they had to fully embrace technological advances to keep up with people’s changing lifestyles. However, it has also set them as some of the most dynamic and innovative companies in the market. Their flexibility to meet the demands of all consumer groups and provide more mediums to connect with them provides a huge advantage and promising investment opportunities.

Trending Businesses Opportunities to Invest in Leisure

. Whether you are seeking to invest or start your own business, there are new niches being carved out. These areas have attracted focused attention:

  • Play Zones
  • Art Galleries
  • Advertising Agency
  • Sports Shop
  • Online Retail
  • Streaming Services
  • Media
  • Digital Marketing
  • Resorts and Hotels
  • Golf Courses
  • Multimedia Companies like Disney
  • Leisure-focused ETFs

The market is ripe with potential. However, the rising tide won’t lift all boats equally. Before making any major financial decisions, you should always consult with your financial advisor. But if you are looking for new opportunities, you should consider to invest in leisure.

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How To Make Money Off Small Town Home Investments

The objective of investments is to have a place to park some of your money, minimize your exposure, and make more money over time. In order to succeed at investing, you need to understand that it is part risk and part lucky planning. Risk is always associated with investing and is often the first significant barrier people have in deciding whether to get involved with investments or not.

But with proper research and planning, you can minimize the potential for catastrophic losses before you even invest a dime. People are often fearful of investing because they don’t understand the foundations and risks that can affect investment opportunities in the first place. One of the things people do is inflate their understanding of investments which leads to added risk, take on too many investments, which leads to added exposure, or act out of fear due to momentary market fluctuations.

So what is a person to do? First, you can hire a financial expert to help guide you. Then, you can take on risks by investing without really understanding the values and fluctuations of the market, or you can look for more long-term, more secure investment opportunities such as investing in real estate. No doubt, one of the safer, long-term strategies for investment is to buy real estate.

Types Of Income Opportunities In Real Estate

In order to make money in real estate, there are three primary ways.

  • Purchase to Sell: With a purchase to sell, you’re buying the property to sell whether you invest money for renovations or sell as-is. The benefit of purchasing a home to sell is that you can make some decent cash, especially in a seller’s market. The downside is that you can take a significant capital gains tax by doing so.
  • Purchase and Hold: With a buy and hold strategy, purchasers have a few different options. One is to buy the home, live in it, and sell it much later in time as you pay down the mortgage and increase equity. The second option is to buy the property with the intent to make rental income over time. The risk here is if you have any layovers between renters, something significant happens that causes loss of revenue, or you can’t charge enough rent to cover your mortgage.
  • Real Estate Investment Trusts: With a Real Estate Investment Trust, or REIT, you join forces with several other investors to purchase Real Estate. The bonus of this strategy is you can buy more Real Estate than you might as an individual and lower your risk along the way. The negative is that you only own a small share of the investment rather than entirely making your profits smaller.

As an individual looking to make money off small townhome investments, a good strategy may be the buy and hold method but with a tiny change. For example, instead of buying a single-detached home and renting it out, consider buying condos or apartments and renting those out instead.

The benefits of buying a condo or apartment versus a home are that the costs are typically lower. In addition, you have the Homeowners Association that will take on some of the day-to-day maintenance of the property outside the condo. As an entry to rental ownership, these may be an excellent first step to consider.

However, if buying to hold and rent out your property is the goal, then finding a centrally located place is ideal. Other considerations are that it has an excellent rental occupancy rate, access to major industries, and is affordable enough that you can charge more in rents than your mortgage are all factors to look for in your search.

For detached, single-family homes, you can look to the suburbs of major metropolitan areas that offer some of the keys we discussed earlier. For example, houses for sale in Moreno Valley provide you with an area of population growth outside of a central metropolitan area (Los Angeles) and stable occupancy rates.

By considering purchasing a rental property in a suburb surrounded by a large population density, such as Moreno Valley, you’re going to have increased demand for rental units while having lower inventory available, further driving the rental market upward and making you more income over time.

4 Reasons People Invest In Gold

Shiny gold bars on black background. Space for text

Historically, people depended on gold mainly for business trades. Today, apart from its aesthetic appeal, gold continues to be a prized asset as this is used in a wide array of industries and purposes. This includes, but is not limited to, creating jewelry, filling tooth crowns, assembling electronics, producing architectural structures, and the like.  Continue reading