An increasing number of Malaysians are diversifying their investment portfolios, turning to alternative assets such as gold, cryptocurrencies, and equities alongside traditional real estate. Market experts view this trend as a strategic move to manage risks and navigate the growing complexities of the financial landscape.
“Diversifying their portfolios allows investors to manage risks and navigate market uncertainties more effectively,” an industry insider told Business Times.
Gold Shines as a Safe-Haven Asset
Gold’s enduring appeal as a safe-haven asset continues to grow, with its price projected to hit US$3,000 per ounce by next year. According to Octa, an online trading broker, geopolitical and economic factors, such as the reelection of Donald Trump as the U.S. president, are driving this trend.
“Trump’s stance on global trade and conflict resolution could impact investor sentiment and demand for safe-haven assets,” Octa noted in a report.
Central banks in emerging economies, including China and India, are also ramping up their gold reserves, which are expected to reach 10% of total holdings by the year’s end, compared to just 3% a decade ago.
“Gold is an inflation hedge, and not just private investors but central banks are also buying gold. This ensures long-term demand for the precious metal,” Octa stated.
Gold prices have also been influenced by high inflation and rising interest rates, which drive investors toward the stability of precious metals over volatile stocks and bonds.
Cryptocurrency Gains Momentum
Cryptocurrencies are another growing investment avenue, with a notable surge in transaction volumes at the cryptocurrency exchange Luno. The platform has reported a 32% increase in transactions this year, with total volumes exceeding RM87 billion.
“More Malaysians view digital assets as a viable means of diversifying their investment portfolios,” said Luno’s Malaysia country manager, Scarlett Chai, during the Luno Insight 2024 media briefing.
Luno’s assets under custody have more than doubled to RM4.28 billion compared to last year, with the platform processing over 72 million transactions, including deposits, withdrawals, and digital asset trades.
The growing interest in cryptocurrencies is partly fueled by Trump’s pro-cryptocurrency stance, which has bolstered confidence in digital assets as a legitimate investment option.
Real Estate Remains Relevant
Despite the rise of alternative investments, real estate continues to be a cornerstone of wealth accumulation for Malaysians. Kashif Ansari, co-founder and CEO of Juwai IQI, emphasized that assets like equities, bonds, and cryptocurrencies complement rather than replace real estate in building resilient portfolios.
“All investors are trying to get the best return they can while taking the least possible risk,” Ansari said.
Affordable housing and prime retail spaces remain attractive investment categories due to their stability and predictable returns. “Government policies support the development of affordable housing, and entry costs are relatively low,” Ansari noted.
While traditional assets like CBD office spaces face challenges such as lower occupancy rates, residential and mixed-use development projects are drawing strong interest from investors.
As Malaysians seek innovative ways to grow their wealth, a balance between traditional and alternative investments appears to be the key to navigating today’s dynamic economic landscape.
