It is never too soon to jump into the investment market. While many people think you need lots of capital or a degree in economics to invest, that’s far from truth. What you do need is an understanding of the market. Knowledge beats everything, particularly when it comes to investing.
So let’s say you’re ready to take the step. You want to start doing more than just saving up some money here and there. There is every need to be able to take the right decisions and be set for the future. While 2020 is already here, the market is looking great – as long as you know what to invest in.
When investing in stocks…
Stay with the big tech
This should be a no-brainer, but it’s good to always mention it. While there’s a certain expectation that the market will enter a recession in the short-to-midterm, recessions won’t necessarily harm everyone. Historically speaking, in fact, it’s the riskier investments that turn out worse during recession.
So for 2020, your best bet will be to stay with big, established, tech companies. That means you should look at giants like Google, Amazon, Disney, Netflix, Microsoft, Apple, and the like.
Even companies like Facebook could do well – they’re already established and stable and thus the risk is minimal with them even if a recession hit. Market dampeners will make stocks tumble no doubt, but it’s quite likely it will recover once the recession is over.
Locate penny stocks with potential
Now, if a recession doesn’t necessarily hit – which means there’s definitely room for growth in the market. A common investment pattern for newer, smaller investors is to look at penny stocks. These are stocks that are very cheap, usually under $1/each.
Now, penny stocks naturally won’t give you the investment returns that, say, having stake in Amazon will. But penny stocks require much less money to invest and they can surge quite quickly, at times doubling or tripling their value within months.
The plan here would be looking at a market you understand and then going for an emergent company within it. Who is innovating, and doing things that will sure become commonplace in the future? Those are your penny stock ideals.
Just as well, long-established companies that are underdogs but gearing up for major releases can be great investments. As an example, AMD’s stock quintupled its value between 2016 and 2017. A 400% ROI in a year is amazingly good, and many people obtained that (or even more – the stock sits at 1500% its 2016 value as of this writing) for a relatively low investment.
Go global and use online brokers
It used to be that investors were locked to only trading whatever stocks their regional markets had.
That’s not the case anymore.
While decades ago trading on foreign stocks meant lots of expensive, annoying long-distance phone calls, these days, there are online brokers, such as eToro, that can allow you to participate in foreign markets just as easily as you can in local ones.
As an investor, make use of it. Not all huge companies are American, and not all companies that are expected to surge in 2020 is in the US. In fact, by having stocks in different markets, you hedge your bets – after all, your Samsung stock isn’t likely to lose value if the NYC market crashes.
Diversify, not only in the companies you invest in, but also the countries and markets you use.
When investing in Cryptocurrencies…
Buy low and sell high is king
When it comes to cryptocurrencies, most people making money are doing so by buying when a token is cheap, then sitting on it as it appreciates. This is how many people made hundreds of thousands, some even millions, of dollars in Bitcoin: By buying when it was cheap (or when it released, when it was about $1/BTC) and then sitting on it until it was worth a lot – for example, when it surpassed the $10,000 mark in 2017.
While it’s unlikely anyone will ever see the massive ROI like people who bought BTC in 2009 and sold it in late 2017, that’s still the best approach towards crypto investments: Look for tokens that are likely to appreciate. Wait until they bottom out. Then buy, to sell later.
Go with margin trading
There are other methods of making money with cryptocurrencies. Short-term, or margin trading, is a common one – and the weapon of choice of many people playing the crypto market.
The trick with margin trading is learning the market and knowing what to expect in the very short term.
Some margin traders might keep a stock for a few days, but the most common type of margin trading – that is, day trading with leverage – this gets people buying and selling tokens within the same day. The profit is thin for each transaction, but the sheer amount of transactions and the volumes you’ll be buying and selling (plus the leverage money) will more than make up for it.
Locate new crypto goldmine
Lead tokens rise all the time, as older tokens fall. Not all tokens have the staying power of Bitcoin and Ethereum, and every year, we see that the tokens that once were thought to be safe bets all but disappear.
The crypto market is yet to settle. As is common with technology, every year, new implementations of blockchain (Cryptocurrency’s base technology) appear, often bringing improvements and new uses for the technology.
This makes new tokens with lots of potential appear all the time. Not all tokens with potential will make it, but some will – and a few years from now, we’ll sure have stories about a new token people bought during the IEO and sold years later at a huge profit just as we have them from BTC and ETH.
Look for what new tokens are out there, or which tokens that have been around are having their day in the sun. Then go for those. And as always, remember to buy low and sell high.
In the end…
The investment market shouldn’t scare you. Even when there’s talk of a recession, that talk has been there for year – and the recession is yet to come. It could come in 2020, but it could also come in 2022 instead.
When it comes to investing, time is money. The day to get started on investments isn’t when the economy is stable, and the future looks rosy and perfect – that just never happens.
An incoming recession means there might be an increased risk, yes, but bigger risk implies bigger rewards. Let’s not forget that, while many people lost everything during the last US recession and housing crisis, some people instead made fortunes as well.
Those people making fortunes. They were investors who knew what to look for and what to bet on.