The world has changed a lot in 2020 and one of the new trends is the mass interest in investing in the stock market.

Have you noticed that the amount of advertising of investment services of banks has already equalled the advertising of perfumes and shampoos? Foreign currency deposits no longer generate income, and even people far from finance are beginning to think about how to make money by investing in stocks and bonds.

The shock caused by the pandemic has forced central banks and governments to allocate huge sums of money (more than $10 trillion in the United States alone) to prevent a full-scale crisis. The economy was unable to digest such a flow of money, so most of it spilt over into the capital markets, leading to a sharp rise in government bond prices and inflating bubbles in the stocks of iconic companies such as Apple and Tesla.

Last year, the main approach to investing was something like this — investing in a business that will benefit most from the mass isolation of the population. Therefore, the leaders of growth were the shares of companies that entertained the population (Facebook, Netflix), provided everything necessary for living (Amazon, Google, eBay), helped to make life better, and helped work at home (Zoom, Microsoft, household goods).

So, even more people become interested in this sphere. Some of them start to explore the topic and some have already started to invest. Of course, it is not just a hobby and one needs to pay enough attention to it especially in the beginning. In that way, the main question is whether it is actually possible to get rich with the help of investments and how beneficial they are.

It is necessary to note that the answer to this question is different for various people. It depends on numerous factors but at the same time, there are some certain rules and tips that help to avoid many difficulties and increase the possibility of a positive outcome. If you are interested in this sphere, read our article to find out more.

You can also find specialized blogs like Forextime that will tell a lot about Forex trading, efx investment, cryptocurrencies, and so on. Living in Nigeria, you can find all the necessary information and news and start trading and investing in a couple of days!

Here are some tips for making 2021 a success.

Deposits Are Dead, Long Live the Bonds!

Investments in deposits are a thing of the past, with central banks keeping interest rates at minimum levels already for several years. The most reliable government bonds also provide a minimum yield, for example, about 1% on ten-year US bonds. To earn 4-5% in dollars, you should pay attention to the bonds of US companies or other foreign currency bonds.

The easiest way is to buy a stake in bond funds, which any large bank now has. Funds are an opportunity to get a ready-made balanced portfolio of stocks or bonds. As if you buy a car in the basic configuration. Everything you need is already there (they thought about it for you), but if you want to add something, you can always do it in the future.

There Can Not Be Too Much Gold

Central banks continue to “print” money, which justifies investing in gold and cryptocurrencies: their private investors perceive it as an alternative to paper money. Leading investment banks forecast gold growth of 15-20% next year. It might also be a good idea to hold up to 10% of all assets in gold in 2021.

Be Careful With Dollars

Some experts predict that the dollar might depreciate against major and developing currencies. The dollar is always declining in a period of accelerating global economic growth. In addition, the United States continues to actively “print” dollars. A weak dollar contributes to rising commodity prices and the inflow of foreign funds into emerging markets, which will support the growth of their stocks and bonds.

Conclusion

So, if you do not have experience in the field of investment, it is better to start with a conservative portfolio, that is, a portfolio with the lowest risk. It is usually advised to form such a portfolio from funds and add to it the shares of individual companies little by little. For example, about 70% of all assets may be in a bond fund, 15% in a stock fund, 10% in a gold fund, and 5% in individual company shares. Such a portfolio next year may earn about 7-8% per year in dollars.