With the world of trading more complicated than ever, we look at how it's still an industry in which anybody can get involved, if they have the right information...
Global conditions post-2020
It cannot be denied that 2020 had a very big impact on businesses, employment opportunities, global economies and investment opportunities. While the year was predominantly grim and led to the downfall of many entities, whilst prompting an increase in the global unemployment rate, it also sparked a new wave of interest in alternative sources of income, passive income and investment opportunities such as share trading, forex trading and cryptocurrencies.
As intimidating as these concepts might seem at first, upon further research and gaining a better understanding of each, it becomes clear that trading is not only reserved for the elite few with buckets of disposal funds. Contrary to popular belief, just about anyone can immerse themselves in the world of trading and, with the right guidance, trading platforms and tools for analysis, be successful at it.
Investment opportunities in 2021
As already mentioned, forex trading, share trading and cryptocurrencies have become buzz words in recent years, with research and statistics providing further evidence of the growing interest in the sector. In order to determine which investment opportunity would work best for you, it is important to get an understanding of each one and what it entails.
Forex (foreign exchange) can be defined as the process of exchanging one currency into another for international trade purposes, profit-making or travel, amongst others. When it comes to profit-making and trading purposes, it is said to be one of the easier investment options for those looking to explore the markets and get a foot in the door in the world of trading.
Cryptocurrencies are essentially digital assets and a form of online payment that can be exchanged for goods and service. Arguably the most popularised and known cryptocurrency is Bitcoin, followed closely behind by Ethereum. Interestingly, cryptocurrency is said to carry a higher level of risk than forex, as there are less case studies to predict market activity and it is not as liquid as forex.
Share trading, for one, is relatively similar to forex trading, but differs in a sense that it deals with the trading of shares within a company. One may invest in such with the aim of earning an annual repayment plus interest on their investment; to an extent, it can be considered a medium to long-term investment option. To get a better overview of the 100 highly capitalised companies in the UK and invest in them, indices trading on the FTSE 100 and similar markets is the best option.
Now, with the above in mind, one can start to assess and identify which option makes sense, bearing in mind your risk tolerance, current resources and trading goals, amongst other things. Investing smart does not steer away from the basics and core principles of investing, such as weighing out potential risks and returns and also assessing demand versus supply of what you are looking to invest in.
Currently, the global landscape and investment opportunities appear to be in favour of the technology sector, as the world is adopting digital operations and because the convenience and access to information that technology brings remains a key component of today’s society. It is a known piece of advice that the earlier you start investing, the better. This will allow you to gradually build your wealth over time, given the power of compound interest.
Additionally, consistent investment efforts and keeping a close eye on the financial markets is key, so as to capitalise on any potentially lucrative opportunities that may arise unexpectedly. Moreover, as one gains experience and builds confidence, it is recommended to diversify your portfolio, in-keeping with the known saying that you should never put all your eggs in one basket.
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