Home Business Insights & Advice Feeling Lucky? How to invest your money when you win the lottery

Feeling Lucky? How to invest your money when you win the lottery

by John Saunders
5th Aug 21 4:30 pm

The lottery is one of the great equalisers in our society. It doesn’t matter who you are, where you come from, or how financially literate you are—anyone can be a winner if the numbers are right.

However, a lack of good financial planning and poor investments are just some of the reasons why so many lottery winners still go bankrupt.

So, what should you invest in if you beat the odds and win the lottery this year? We’ll go over some of the investments trends for 2021 that will keep your financial windfall growing.

Healthcare

With the current COVID-19 pandemic, healthcare has been a hot topic around the globe. And just as coronavirus has shaken up the world, it has also impacted the healthcare investing space.

Where the sector once focused primarily on ageing, the pandemic has shined a light on a huge lack of innovation in the industry. It has also highlighted the importance of virtual care technologies.

Experts look to two names we’ve heard a lot of this past year when it comes to healthcare investments: Pfizer and AstraZeneca.

In 2020, these vaccine manufacturers actually took a financial hit or underperformed on the stock market. However, experts say they have proven their ability to produce products and innovate, and that makes them worth considering in your portfolio.

Technology

With many offices turning to a work-from-home format and consumers turning to online shopping during the pandemic, technology has never been more important. Research shows that these shifts in daily life are here to stay.

In a survey conducted by the British Council for Offices (BCO), 68% of senior executives, 58% of entry-level workers, and 46% of office staff say they will continue to spend less than five days a week in the office.

The firms Alvarez & Marsal and Retail Economics also estimate that about 25% of Brits plan to make the switch to online shopping more permanent. This shift in consumer habits over the past year has driven huge growth in online retail sectors, while also dealing a big blow to many low-tech, brick-and-mortar businesses.

Two online businesses that each saw a surge in consumer demand over the past year are the meal-kit delivery company Gousto, and the online used-car dealership Cazoo.

Ethical and ESG funds

Another emerging asset in 2021 is funds that focus on environment, social and corporate governance (ESG). Not only is this trend fuelled by ethical concerns about climate change and the future, but also by the pandemic-caused decline in traditional investments like oil and airline stocks.

Investment platform Hargreaves Lansdown observed that ethical and ESG funds doubled in the 12 months leading up to June 2020. Analysts from platform Interactive Investor also found that sustainable and ethical investing were huge drivers of growth over that time period, and expect this to continue through 2021.

There are currently over 2,500 ESG funds, with more than 70 launching in just the first quarter of 2020. However, some of these funds may not yet be open to UK investors. Within those funds, there are more than $1 trillion of assets under management.

Invest with caution

Just like playing the lottery, investing in the stock market is, of course, inherently risky as there are no guarantees. This has never been truer than in the last year and a half. In 2021, we can expect to see continued uncertainty in the market as the world recovers from the damage wrought by COVID-19.

Experts suggest taking a two-pronged approach to investing by balancing a portfolio with stocks in sectors focused on a return to normalcy—like hotels and airlines—with ones that cater to the stay-at-home lifestyle, like the company Just Eat. Using this strategy will help mitigate the risk of placing too many eggs in one basket.

Play smart

Of course, if we’re talking about how you can invest your lottery winnings, that means you have to play the lottery in the first place.

Just as there are ways to invest more strategically, there are also ways to play it smart when it comes to buying lotto tickets. To give yourself an edge when playing international draws like Euro Millions and US Powerball, you can boost your odds by joining a lottery syndicate.

However, just like with the stock market, playing with caution is always the best bet.

 

Please play responsibly. For more information and advice visit www.begambleaware.org

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