An Investor Can Only Be as Good as His Market-Watch. Here Are 15 Zones to Lock on the Radar.
Welcome back Aluxers. Being 2020 and all, you’ve probably heard the words ‘uncertain times’ being used quite a lot. And it’s true that uncertain times bring risks in investment markets. But with investing, as with all kinds of things, with risk comes opportunity too.
Aluxers, let’s be clear here. We’re not advising you on which stocks to buy. Or even which sectors to invest in. And we want to remind you that any investment involve risk. What we are encouraging you to do is to do your own research. What we’re saying is that whether you invest in them or not, these are some markets that it’s definitely worth keeping an eye on.
Markets apart, what every Aluxer should always watch are the video versions of our articles. It saves you the time of reading a long article:
So let’s get to it, and look at 15 Markets Every Aluxer should be watching.
1
Crypto
You’ve probably noticed it’s getting mentioned more and more. No prizes for guessing what that means. Yep — it’s getting bigger and bigger. Just look at the price of Bitcoin over the last decade. True, crypto investment markets crashed in late 2017— but it’s come back up a lot since then, even if not all the way back to where it was. And if it ends up replacing national currencies as the main way we do transactions — a lot of people predict it will — then it’s only going to keep on going upwards.
When you’re deciding which crypto to invest in, Bitcoin has a few advantages, especially if you’re new to investing. First, it’s more liquid than any other crypto — that means easier to buy and sell. Second, it’s being used more and more for transactions, and is becoming more widely accepted — which means demand’s likely to stay high. Third, yes, it is volatile — remember the crash in 2017. But less volatile than other crypto.
Ethereum and Litecoin are also well established — but not as well as Bitcoin. And keep in mind there are another four thousand cryptocurrencies to choose from. Advantages of the other ones? Well, they haven’t exploded like Bitcoin has. That means that if you manage to pick one that does explode, you’re looking at huge gains. Of course, which crypto does that is the billion-dollar question — literally.
2
Pharma
The pharma market always has huge potential for gains. And as we’re in the middle of a pandemic — that means we should be keeping our eyes even closer on it. Just look at earlier this month, when Pfizerand BioNTech announced they’d come up with a workable vaccine for COVID-19. It sent ripples across the whole stock market — and their own stock upwards. Interesting to note, it wasn’t just Pfizer and BioNTech that did well out of this. Other Pharma stocks went up too. Including rival vaccine maker, Moderna — another biotech company focused on making vaccines, and definitely one to watch.
Let’s remember that even with a vaccine now on the market, nobody knows exactly where the COVID story is going to go from here — when it comes to the health of the world, or for what we’re focused on here, the pharma market. But it’s fair to say that in the coming months, there’ll be a lot of action — and investing in the right pharma stocks could pay off very nicely.
3
Clean Energy
The world is slowly but surely switching from fossil fuels to renewable energy. This switch is going to take trillions of dollars — and a few decades. Investors who are aware of the investment markets are wise enough to make some big profits.
According to industry insiders, solar power will be at the forefront. Onshore wind is predicted to take second place, and hydropower and offshore wind behind them.
Some of the biggest publicly traded companies in this sector are Brookfield Renewable Partners, who operate in all kinds of renewables, and are headquartered in Toronto. And First Solar, based in Arizona, one of the world’s leaders in thin-film solar panels.
4
Energy Storage
This sector’s also leading the charge against fossil fuels. But still, it’s considered a separate market from renewable energy. But what it has in common, is a lot of potential for investors. That’s thanks to the growing demand for long-cycle batteries for electric vehicles, and smaller batteries for electronic devices.
And the real star of this sector is Tesla. Yes, they’re in the automotive sector too — but what makes them really stand out from the crowd is their battery technology. And Tesla does look like a good prospect for investing in. Of course, if you’d invested in them ten years ago — or even two years ago — that would have been even better. If you’re more ambitious, you might want to try and pick out the sector’s next Tesla. Of course, doing that is far from easy.
5
Online Platforms
In this group we’re including social networking — Facebook and Twitter — and e-commerce, like Amazon and Alibaba. Share prices for all the ones we mentioned shot up this year. Because we’ve been using them more and more. And there’s no reason to think this trend is going to stop any time soon. Which makes them another attractive market to invest in.
Others to look into include Trade Desk, a leader in advertising programming. And Shopify, which has been going up and up since 2015, and is even looking at giving Amazon a run for their money.
Aside from Shopify having potential as an investment, as it being especially useful for small and medium-sized business. We’ve partnered with them for years, and we can highly recommend them for any kind of e-commerce business you’re thinking of setting up online. If you’re looking into setting up your own business online, why not click here, and see what they have to offer.
6
Silver and Gold
Time to take a quick break from investing in companies. And get to grips with other investment markets, one that’s especially interesting in times of uncertainty — commodities. More specifically, precious metals.
There’s more to them than bling. Investors with a diversified portfolio very often some of their money into metals like silver and gold. That’s because they’re considered safe havens in times of financial uncertainty. Which means that when their shares go down, the price of silver and gold goes up.
And the reason for this is the big institutional investors —that means mutual funds, and insurance companies, who drive a lot of the market. Whenever there’s a risk of recession or war, they move their holdings from stocks that are considered unsafe — that means most shares. And the invest them in safe havens — anything that’s been proven to hold its value over time. And two of the biggest safe havens are silver and gold. In other words, when the stock market does badly, the price of silver and gold go up. Just keep in mind that the opposite is true as well.
7
Platinum and Palladium
Silver and gold aren’t the only precious metals to invest in. Less known ones you might want to consider are platinum and palladium investment markets. They’re sometimes used in high-end jewelry. You’ll find Hermes handbags that contain both of them. And they’re also in high demand in the auto for electronics, medical equipment, dentistry and the auto industry.
Investors should know that they’re also considered safe havens — and they’re rarer than silver and gold, and more valuable. Their prices are also very volatile, which makes them less common choices as safe havens than silver and gold.
8
Real Estate
Anyone who wants to consider themselves financially literate, should have an eye on the real estate market. That’s for all kinds of reasons. That includes if you’re looking to buy or sell a home. As well as looking at investing.
In 2020, it’s been an interesting one to watch. Unlike the 2008 crisis, when property markets crashed, real estate is actually doing well right now. In many countries, prices are going up. That’s partly down to the nature of the pandemic — it’s made people want to own the house they live in — and increasingly work from. And it’s also down to interest rates being low — that’s good news if you’re taking a mortgage.
What if you’re eager to invest on the real estate market, but don’t have the cash to buy a property? Did you know about REITs , or Real Estate Investment Trusts? They’re companies you can invest in, that own, manage or finance real estate to generate an income. Kind of like mutual funds that make their money from real estate. And that means you can invest in the real estate market without having to buy property in full.
If you’re not ready to go nose deep into the real estate waters, you should see “How do real estate dreams come true with trading on Forex“.
9
Airlines
You don’t need to have had your eyes glued to the financial news to know that airlines have done badly in 2020. And they’re not expected to recover for a few years. But sooner or later, they’re almost bound to make a comeback. That makes them potential for what’s known as a recovery stock. In other words, a stock you buy when it’s low — and expect it to make a comeback at some point later. And airlines are one market investors with long-term horizons have their eyes on.
10
Hospitality
Another industry we all know has been hit by the pandemic — hotels. But they do show signs of being quicker to rebound than airlines. And if you’re on the lookout for recovery stocks, this could be one of them. Keep in mind, if you’re looking for a quicker return that an investment in airlines, don’t expect it to come that soon.
Recently, Morgan Stanley made a list of stocks to look out for, which included several hotels, which it pointes to as recovery stocks. They included Marriott International, Hilton Worldwide and Las Vegas Sands.
11
Automotive
The auto industry is huge — and very visible. In other words, we can all reel off a list of car brands. And the fact that it’s visible means that it always get attention from investors.
Like a lot of shares, auto makers crashed early in the year, but a lot of them have been making a steady comeback since then. And some are saying they’re likely to keep in in that direction.
Some safer ones to go for could be some of the biggest names, like Ford, Fiat Chrysler and Volkswagen. And General Motors, which Morgan Stanley list as a potential recovery stock of 2020.
And yes, let’s give Tesla another mention — it belongs to this industry as well as batteries.
12
Marijuana
Around the world, and even inside the USA, the legality of using marijuana varies quite a bit. And it depends on whether it’s for medicinal use — or just for getting high. But wherever you’re from, it’s totally legal to buy publicly traded stocks in legal marijuana companies.
For a while now, it’s been hyped as one of the biggest investment opportunities around — like tech stocks in the 90s. The thinking behind that is that the world’s going in the direction of decriminalising and legalising for medical and recreational purposes. And there’s plenty of potential for share prices to get higher and higher. No pun intended. OK, maybe it was intended.
But a word of warning. It’s a young market, which is unpredictable and very volatile. That means that despite all the hype, it’s easy to lose money on.
Most of the biggest marijuana companies are based in Canada, known for its liberal attitude to marijuana, and include names like Aurora Cannabis and Canopy Growth.
13
SaaS (Software as a Service)
In case you’re not sure what that is, it means a cloud-based service that you can access as an app or on an internet browser, instead of having to download the software onto your PC or laptop. It makes it more accessible — more compatible — and saves you memory on your devices. Some pretty big advantages, which people have been paying picking up on recently. So, no wonder it’s such a big growth area.
Even if it’s your first time hearing the term SaaS, you’ll know some of the companies behind the sector, and some of the big names also present opportunities for invest in right now. Among them, there’s Microsoft — if you use Microsoft Teams, that’s an example of SaaS. As are Skype, Slack, and Adobe.
14
Fintech
This is a huge growth sector. The Ant Financial IPO which was supposed to happen early November would have been the biggest in history. We don’t know what’s going to happen with Ant Financial, but it illustrates what a growth sector it is. Other Fintechs that look attractive at the moment include Square and Paypal.
If you’re new to the investment markets of Fintech – especially if you’ve heard the word being used a lot, but are still a bit foggy about what it means — be sure to check out our video, 15 Things You Didn’t Know About The Fintech Industry.
15
Slow-Growth Stocks
So the one we’ve left for last is basically the boring, unsexy ones. Stocks that don’t involve ground-breaking technologies, new consumer trends, or anything glamorous. They’re also stocks that you don’t expect to grow loads — hence the name. They could be utilities — utilities that don’t involve 5G or renewable energies. Like water supply. Or everyday manufactured consumer products, retail, food and drink, or clothes that aren’t high fashion.
We can already hear you asking — but Alux, if they’re slow-growth, why would we want to invest in them? The answer’s simple. They have one bonus that fast-growth stocks don’t. They pay good dividends. Because they’re stable industries that aren’t growing much, they don’t have to invest their earnings in research, or scaling up production equipment. Instead, they can attract investors with steady flow of dividends payable to shareholders. And the second plus point — the fact that they’re stable.
Question
Which of these do you think is the most exciting opportunity for investment?
