Consequently, the current macroeconomic backdrop is not a recipe for decent investment returns in stocks, bond, and cash. This represents a significant challenge for investors and savers alike, who are already under increased pressure due to decisions made by successive governments, which have introduced a series of restrictions on pensions. Further compounding the issue, the financial strain caused by rising inflation and the cost-of-living crisis are causing significant stress for investors.
Providing essential tax relief
This year, tax and pension planning will undoubtedly be two key issues influencing investors. Even before the Chancellor’s Autumn statement, which raised the UK’s tax burden to its highest level since Clement Attlee’s post-war government, a series of restrictions on pensions has forced many savers to look for alternative tax-efficient options for their capital.[1]
Indeed, the government's decision in the Spring of last year to reduce the lifetime allowance on savers’ pensions and lock it at this level until 2026 will see any remaining excess in pensions pots subject to a 55 per cent tax penalty.
Venture Capital Trusts (VCTs), such as Triple Point’s Venture Fund VCT, can provide investors with a crucial investment and supplementary pension tool. This comes at a time when the government is raising record revenues from taxpayers, thus making it critical that investors put their money to work effectively.
The tax-free dividends offered by VCTs, alongside no capital gains tax (CGT) on gains, make them an attractive alternative source of tax-free income, which can complement a traditional pension portfolio.
Furthermore, over the last ten years, the average net asset value total return for both AIM VCTs and generalist VCTs has been 101%, making VCTs not only a tax-efficient vehicle but also a competitive investment product in its own right.[2]
Thinking beyond 2023
However, it is not enough to merely focus on the tax situation this year. Many investors will find their tax-free allowances and thresholds squeezed by 2024 if they don’t act now.
With the tax-free dividend allowance being reduced to £1,000 in 2023 and £500 from April 2024, VCTs remain one of the most tax-efficient investments by allowing investors to claim upfront tax relief worth 30% of the amount invested, up to an investment of £200,000.
For business owners who have traditionally reduced their income tax liability by investing large sums into their pension or paying themselves dividends, these changes can have a devastating impact on their financial and pension planning if they are not addressed.
By investing in a VCT, business owners and other investors who have used dividends as a vital source of income can significantly reduce their financial exposure to the costly shifts in the UK’s tax and pension planning regulations, which look likely to occur over the next decade.
Selecting the right strategy
To truly capitalise on the benefits of VCT investment, investors and savers should look to invest in VCTs that they think have the best strategy. With over 20% of start-ups failing within the first five years, implementing the right investment plan can help mitigate the risks that come with investing in early-stage companies.[3]
A successful VCT strategy should follow a key investment criterion ensuring that each early-stage company has an appetite for growth and a path for long-term profitability. This involves working alongside VCTs to solve real-world corporate challenges. For example, Strategic VCT investments enable innovation in young companies, helping create local and highly skilled jobs while allowing the investor to back high-quality and better-capitalised companies with lower valuations.
Triple Points Venture Fund VCT, for example, adopts a challenge-led approach to investment which primarily focuses on pre-series A B2B technology businesses. With high-growth B2B technology businesses accounting for 77% of all exits in 2019, this sector tends to offer better valuation on entry and better returns.[4]
Supporting dynamic and innovative companies
Whilst tax relief is one of the primary appeals of a VCT investment, it is difficult to ignore the role in which they play within the wider UK economy. VCT fundraising in 2022 surpassed the £1 billion milestone for the first time, raising £1.13 billion to be invested in small and innovative UK companies.[5]
Despite the daunting in-tray which investors face, the benefits of VCT investment have never been greater. It offers an opportunity to both support and capitalise on a wave of British entrepreneurialism emerging from this recessionary period. For business owners, VCT investment allows them to efficiently extract profits from the business at a time when the UK government is slashing the dividend tax allowance.
If investors don’t act now and plan ahead by incorporating VCTs into their investment portfolio, they risk being exposed to increasing macroeconomic pressures and foreseeable changes to the UK’s pension and tax systems.
[1] https://www.independent.co.uk/money/uk-s-tax-burden-what-do-the-figures-show-b2097564.html
[2] https://www.theaic.co.uk/aic/find-compare-investment-companies/advanced-compare
[3] https://www.investopedia.com/articles/personal-finance/040915/how-many-startups-fail-and-why.asp
[4] https://www.triplepoint.co.uk/filedownload.php?a=750-5f802c8866add
[5] https://www.theaic.co.uk/aic/news/press-releases/smes-to-benefit-from-record-funding-as-vcts-raise-over-a-billion-in-202122
As the total crypto market cap dropped by $90 billion within 24 hours, the number of searches containing “Bitcoin dead” surged.
While experts are divided on what the plummeting of cryptocurrency means — a temporary setback or signs of a larger recession — it is clear that the increased volatility of the market offers many lessons for investors. Whether you’ve been hesitant to invest in crypto or are second-guessing your choice to do so, here’s how the crypto crash illustrates the risks of cryptocurrency investments and what you can do to manage those risks.
Understanding the risks associated with crypto
The crypto market isn’t a stranger to crashes. Bitcoin alone experienced a major crash in late 2018, followed by significant crashes during the COVID-19 pandemic. However, crypto’s tumble into its lowest levels since 2020 is evidence that holding onto your crypto assets can be a dangerous game in itself. Even Coinbase has laid off 18% of its workforce, and many investors are predicting a long-lasting crypto winter. We’ll explore some of the risks that the current state of the market has unearthed.
Loss of money
One of the core lessons that the crypto crash can teach investors is the fact that cryptocurrency isn’t a reliable investment at all. When you hold onto your crypto assets through a crash — or when you decide to take advantage of low costs to invest — there’s never a guarantee that your assets will bounce back. This is because cryptocurrency like Bitcoin has no intrinsic value.
To manage your risk, it’s important to avoid putting all (or even most) of your eggs in the crypto basket. Crypto should be treated as a gamble. Whether you sell or keep your crypto assets should be a question of how much you’re willing to risk, and perhaps what reward you’re waiting for before you cash out. If you’re looking to increase your profit to reach your long-term financial goals, maintaining safer investments, like high-yield savings accounts and index funds, is ideal.
Reputational harm
If you’ve developed a professional network or gained followers due to your crypto usage, the current crypto crash may have been a blow to your reputation. For many old-school investors and others outside of the investment world, the crash is being viewed as evidence that crypto isn’t a legitimate investment.
One key to risk management for crypto investors is being willing to take ownership. When crypto falls more than you expected, be willing to admit your miscalculations. Continuing to promote crypto as a volatile market can damage your reputation further when the market fails to bounce back quickly.
Cybersecurity threats
The plunge in cryptocurrency value hasn’t deterred blockchain hackers from taking advantage of virtual vulnerabilities. As the market crashed, hackers made off with $100 million in cryptocurrency. Crypto and NFT thefts and fraud are continuing to rise.
Choosing a secure internet and a cold wallet is key to reducing risk when investing in crypto. Cold wallets aren’t connected to the internet — which limits your susceptibility to cyberattacks — and are protected by physical keys that you can store in a secure place. You can even store your assets in multiple wallets to get further protection.
However, it’s always important to keep potential insider threats, which cause over 30% of breaches, in mind. People close to you — and even those inside investment firms — are more easily able to hack crypto wallets and steal funds. Avoid having your entire investment portfolio on a public blockchain, which can make you a greater target for hackers. Ideally, crypto shouldn’t make up more than 5% of your portfolio.
Environmental issues
Cryptocurrency is widely recognised as a threat to the environment due to the large amount of energy needed for mining. Unfortunately, the crypto crash doesn’t have much of a silver lining, as the amount of processing power used for mining isn’t declining. This is an important time for investors to consider the carbon footprint they’re leaving behind, as well as evaluate whether the environmental and financial costs of energy are worth the uncertain earnings.
Stablecoins are not so stable after all
Many crypto investors turn to stablecoins to avoid the volatility of the greater crypto market. Stablecoins, like Tether and Terra, are meant to maintain their value since they’re pegged to real assets, like gold or the U.S. dollar. However, TerraUSD crashed with the rest of the crypto market, leading to disastrous results for its sister token Luna.
Investors must recognise that there isn’t actually a safe way to enter the crypto market. Stablecoins don’t provide the stability they’re meant to, which means they can’t reduce your risk. As international governments discuss the possibility of regulating stablecoins, the future of stablecoins is largely unknown and, once again, a gamble.
Protecting yourself from bad crypto investments
While there isn’t an easy way to protect yourself from bad crypto investments, there are a few ways you can evaluate how reputable a cryptocurrency is. For instance, you can read up on the team behind the cryptocurrency — which should be disclosed and experienced — and read about their roadmap, so you can evaluate their potential for success. Taking a look at a cryptocurrency’s trading history, which should display steady growth, is also key to limiting your risk.
If you’re part of an investment firm — which is likely already taking steps to evaluate crypto — you can still take action to protect your business by keeping your organisation agile. In a volatile market, a firm that learns from failure and eliminates bottlenecks created by silos and hierarchies is best equipped to think on its feet when issues occur.
There’s no telling what’s in store for crypto in the future, so anyone involved in or considering investments must be wary of the market’s volatility and take steps to manage their own risk.
About the author: Adrian Johansen lives and thrives in the Pacific Northwest. She covers topics related to business and tech, especially when they intersect with sustainability and diversity issues. You can follow her on Twitter at @AdrianJohanse18.
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1. Dollar destruction
The value of the dollar against Bitcoin highlights the effect decentralised currencies such as crypto are having in this arena. When you look at how much the dollar has devalued against Bitcoin over the last five years, it sits at 96.53%. It took 50 years for it to drop in value by 50% against gold. This is because of a global debt crisis. Chief economists say that printing and devaluing more of a nation’s currency is the easiest way out of a debt crisis. Of the roughly 750 currencies that have existed since 1700, only about 20% remain, and those that remain have all been devalued.
Another reason is inflation. It stands at a 40-year high. Many will look to the war in Ukraine and rent hikes for answers to gross inflation, however, many others disagree. These unpredicted events just happen to coincide with inflation after a record increase in printing dollars – 35% of all US dollars have been printed in the last 10 months. In practice, this means that as global economies begin to start up again after the pandemic, this record amount of dollar production is now catching up via inflation. This is also not a nuanced effect, nor endemic solely to the US, we are seeing it happening in the Eurozone too.
There is actually very little a country can do to combat inflation. Its main option is to print more money, making the physical currency more expensive to store and move. This increases interest rates and lowers growth. However, if the growth is low, it pushes you into recession. We are seeing this economic trend play out, with Deutsche Bank informing investors that they are expecting the worst recession in history to hit towards the end of 2023.
2. Age of exponentials and where to look
There are five areas of high growth that many investors should be looking at and these are Edtech, Medtech, Greentech, Space-tech and Fintech.
Obviously, these are all the major areas of tech that are disrupting and decentralising the current centralised systems. Society 4.0 is moving to Society 5.0, from the industrial to an age of impact. Societies are broken down into 1.0 – Hunter-gatherer, 2.0 – Agrarian, 3.0 – Industrial, 4.0 – Information. The transition is at first obvious but becomes embedded into our societal and economic systems, this is what we are currently seeing with big data. All of the fastest-growing companies and exponential technologies are now in this area.
When we look at this trend, what is really interesting is how much it has grown in the last 12 months and the projections over the next decade. ARK Invest, an investment management company, has researched the market growth of exponential technology. Their research shows that, by 2030, these sectors are on track to grow to $210 trillion from $20 trillion in 2020. But as these areas of technology that are seeing this exponential growth are numerous, choosing ‘your wave’ is crucial. One area that has interested me and I believe has advantageous benefits is utilising AI in business. As AI becomes more prevalent in the marketplace, it will improve a company’s reputation and valuation as its products will become more customer-centric and drive engagement. When looking at ARK’s research in this area, they suggest that this is on track to grow from $2.5 trillion in 2021 to $87 trillion by 2030.
Personal experience of leveraging exponentials specific to interests in investments and business are usually easier to research and put into action as the passion is already there. Exponentials represent numerous factions of a 5.0 society, and as we move into it, we must all look to what we can leverage personally, whether it be investments or integrations of other exponentials such as battery technology, cloud computing or blockchain, for example.
3. The digital decade
Everything that we do is being digitised and will encompass Society 5.0; in the digital decade, this will be apparent through a digital overlay on your day-to-day experience. Foresight and action have helped me as an entrepreneur stay ahead of this curve and pushed my interests into this field. We are now looking at partnering with some top-level partners for our ‘Metaversity’, which creates digital campuses for Edtech.
When we look at the history of the web, it is broken down into Web 1.0: accessible content was read -only, Web 2.0: the emergence of blogs and social media, the public was able to create content, Web 3.0: what we are now transitioning into – allows users to have ownership. For example, music was incredibly difficult for artists to monetise, but through NFTs, we are now seeing this being challenged.
The merging of our digital and physical lives will look at Social Spaces (what you build to interact with), Digital Objects (NFTs) and Wallets & Identity - people will need to know that you are real and that they can pass something to you, ie, assets through blockchain or currency.
What this means when looking at investing is that it will shift the paradigm. In the integration of Web 3.0, we must start to ask ourselves not just what we want to invest in, but also, what is the social group or economy we want to invest in? Right now, we are born into a nation with its own economy, so your assets and finances are by default, intrinsically linked. This is an incredibly important aspect, as Web 3.0 will negate citizenship and structured economies. Your wealth will not be linked to your physical citizenship, but to your digital citizenship. What this means in practice is that wealth will no longer be connected to place, but to purpose. Everyone will have the opportunity to build an economy around their individual purpose.
The 2022 Global Impact Investor Summit hosted on the edtech platform GenuisU, saw keynote speakers Roger James Hamilton, Founder & CEO of Genius Group, world-renowned investor Jim Rogers, Marcus de Maria, Founder & Chairman of Investment Mastery, Simon Zutshi, Founder of property investors network (pin), and Mark Robinson, Founder of International Academy of Wealth, share their top 10 investment trends for 2022-2023. Roger James Hamilton, founder and CEO of Genius Group offered his detailed analysis and the whole summit can be viewed online.
About the Author: Roger James Hamilton is a New York Times bestselling author and Founder and CEO of Genius Group, a multi-million dollar group of companies, headquartered in Singapore, which currently includes companies such as GeniusU, Entrepreneurs Institute, Entrepreneur Resorts and Genius School and has an acquisition plan to add in a further 5 companies in 2022 to the Group.
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The outlook for the crypto market looked bleak on Tuesday following a brief rally on Monday that sent Bitcoin above the $31,000 level for the first time in six days.
In the past 24 hours, the combined market cap of all crypto assets has dropped by $90 billion to just over $1.2 trillion. Bitcoin is now trading at approximately $29,500, down 5% in just one day.
However, analysts have recognised recent institutional investor interest in Bitcoin exchange-traded products as a sign of long-term strength in the crypto market.
"It's largely institutional, and to a degree retail investors, recognising that the pain is already endured, and we're closer to the bottom than we are to the top,” Chief investment officer of Arizona-based IDX Digital Assets, Ben McMillan, told Reuters.
"If you're getting into crypto at these levels, a little near-term volatility could be worth a long-term payoff.”
To help you on your journey, here are several tips that all successful traders follow religiously.
They Have A Plan
The first and most important thing that all successful traders have is a plan. This plan includes their investment goals, risk tolerance, and entry and exit strategies. Without a plan, it is very easy to get lost in the sea of information out there and make impulsive decisions that can lead to large losses.
To come up with a plan, you need to first determine your investment goals. Are you looking to make a quick profit or are you more interested in long-term gains? Once you know your goals, you can start thinking about how much risk you are willing to take. Higher risks usually mean higher potential rewards but they also come with a greater chance of losses.
After you have determined your goals and risk tolerance, it is time to develop your entry and exit strategies. These will be the rules that you follow when buying and selling assets. For example, you may decide to only buy stocks that are trading below their intrinsic value or you may sell an asset as soon as it reaches your desired profit level.
They Use Automation
Many successful traders use some form of automation in their trading. This could be something as simple as using a trading bot to execute their trades or it could be a more complex system that includes algorithmic trading. Using RoboForex, you can easily automate your forex trading strategies. For instance, using the MetaTrader platforms allows you to set up expert advisors that will automatically follow your trading rules.
Additionally, using automation can help you to take emotion out of the equation and make more logical unbiased decisions. It can also help you to execute trades faster which can be crucial in the fast-paced world of trading.
They Keep A Trading Journal
Another important habit of successful traders is that they keep a trading journal. In this journal, they track their trade setup, entry and exit points, and profit or loss. This helps them to stay disciplined and accountable for their trades. It also allows them to go back and review their previous trades to see what worked and what didn’t.
This has shown to be an extremely useful exercise for many traders as it allows them to improve their performance over time. If you don’t already keep a trading journal, it is highly recommended that you start doing so.
They Have A Risk Management Strategy
Risk management is one of the most important aspects of trading. Without proper risk management, it is very easy to lose all of your capital. That’s why successful traders always have a risk management strategy in place before they even enter a trade. This strategy includes things like setting stop losses and taking profits at predetermined levels.
By having a risk management strategy, you will be able to limit your losses and protect your capital. This will allow you to stay in the game even when things are going against you.
No matter how good of a trader you are, there will always be times when things don’t go your way.
That’s why it is important to prepare for the worst. This includes having enough capital to cover your losses and being able to emotionally handle losing streaks. Many traders blow up their accounts because they are not prepared for a losing streak. By having the proper mindset and capital in place, you will be able to weather any storm.
They Stay Up-To-Date
The world of trading is constantly changing. New products are being introduced, regulations are being implemented, and economic conditions are always fluctuating. That’s why traders need to stay up-to-date on all the latest news and developments.
This can be done by reading financial news articles, following thought leaders on social media, and attending industry events. There are also many great resources like Traders Laboratory where you can find useful information and connect with other traders. By staying up-to-date, you will be able to make better-informed trading decisions and you will also be able to adapt to changes in the market quickly which can give you a competitive edge.
Conclusion
Successful trading investors tend to follow similar patterns and guidelines to be successful. Some of these include automation, maintaining a trading journal, implementing a risk management strategy, and staying up-to-date with the latest news and developments. By following these tips, you will be on your way to a more successful trading career.
This is why the success witnessed in the UK property market was quite special. The resilience of the market saw investors presumably looking to cash in on assets that have been historically reliable during a time when other opportunities haven’t looked as stable. Clearly, when looking at recent figures, this isn’t slowing down, with houses selling faster than ever, twice as quickly as they did in 2019, according to Rightmove’s house price index.
This boost in market activity is coupled with the surge in rising house prices recorded across each of the major recognised UK house price indices. For example, Nationwide's April house price index revealed that average property prices have now reached £267,620, the ninth straight month of growth.
Of course, this should not encourage complacency – the property market is not impervious to market volatility, particularly in the face of rising inflation and a cost-of-living crisis.
That said, with all Covid restrictions coming to an end at the beginning of the year, the health of the market is set to receive a significant boost in the form of international investors keen to take advantage of the freedoms not as readily available in previous years.
What is the role of international investment?
Attracting non-domestic investment will be vital. Not just to maintain the current growth of the market once domestic activity begins to lose momentum, but to help with the country’s economic recovery.
Fortunately, this appears to be the case since the reopening of travel into the UK. According to Knight Frank’s City Wealth Index section of their 2022 Wealth Report, in 2021, London saw more cross-border private capital in real estate than any other city in the world, with over $3 billion invested. Their forecasts estimate this trend to continue over 2022, with a further $24 billion expected to be invested in the capital.
The demand is certainly here for international investments when considering the UK’s housing crisis as the country desperately needs to address the chronic shortage in housing. According to one estimate commissioned by the National Housing Federation (NHF) and Crisis from Heriot-Watt University, around 340,000 new homes need to be supplied in England each year, of which 145,000 should be affordable. However, only 216,000 new homes were supplied in 2020/2021.
International investors have the potential to play a key role in supporting the construction and development sectors by buying new residential units off-plan and funding development schemes, particularly at a time when the knock-on effects of the pandemic have contributed to the slowdown of construction.
As such, they have the potential to achieve strong returns, especially when investing in growing areas. Regional areas outside of London, such as the West Midlands and North of England, are also very much on investors’ radars and will be ones to watch as they continue to gather pace in the years to come.
Could current macroeconomic headwinds slow down international investment?
Despite the promising signs, one must also acknowledge that the macroeconomic headwinds at play could impact the pace of growth.
For one, interest rates have continued climbing, having recently risen to 1%. Usually seen as a negative headwind for property investors, increased base rates tend to be followed by a rise in mortgages. Any overseas investors already operating on a variable term mortgage will see rates rising, while those considering taking a new one out to purchase UK property will have to factor in higher mortgage rates than they would have experienced last year.
Of course, the reason the Bank of England has increased interest rates is to control soaring inflation; another potential concern for the investors. Prices are set to rise to 10% this year – the highest rate for 40 years alongside increased energy bills and goods prices. A combination of high interest and inflation could erode rental returns and devalue the property if house price growth slows. Not to mention the consequent cost-of-living crisis brought on by raised costs has an indirect effect, as tenants could struggle to afford rents.
However, with all this said, international investment in the UK is unlikely to falter when the demand for new property is so high. Meanwhile, the drop in the pound since the UK’s withdrawal from the EU means that favourable exchange rates will see investors’ money stretch further.
With so much economic uncertainty off the back of a, to put it lightly, challenging two years, it is more important now than ever that we take full advantage of international investment flows. Harnessing the potential of this vital resource will be key to ensuring the continued healthy growth of the industry, the creation of new homes, and the wider economy in general, as we look to put recent times behind us.
About the author: Jamie Johnson is the CEO of FJP Investment, an introducer of UK and overseas property-based investments to a global audience of high net-worth and sophisticated investors, institutions as well as family offices. Founded in 2013, the business also partners with developers in order to provide them with a readily accessible source of funding for their development projects.
Mid-week, investors wiped nearly 25% off Target shares after its profit halved. Meanwhile, Walmart was down 1.3% on Thursday after already falling more than 17% in the two sessions after it announced poor results on Tuesday.
Target’s earnings revealed consumers have been spending more on food and household essentials but cutting back on high-margin items. Meanwhile, Walmart’s earnings revealed consumers had moved to buy lower-margin basics.
On Tuesday, Federal Reserve Chair Jerome Powell pledged the US central bank would rise interest rates as high as necessary to combat spiralling inflation.
"We think the developing impact on retail spending as inflation outpaces wages for even longer than people might have expected is a principal factor in causing the market sell-off today," commented Paul Christopher, head of global market strategy at Wells Fargo Investment Institute. "Retailers are starting to reveal the impact of eroding consumer purchasing power."
In the past month, 15.5% of all Bitcoin wallets slumped into an unrealised loss as the cryptocurrency dropped to the $31,000 level.
Glassnode analysts noted that this sudden flurry of “urgent transactions” amid the latest Bitcoin sell-off, which saw investors pay higher fees, indicates that they were willing to pay a premium to speed up transaction times. Over the last week, the total value of all on-chain transaction fees hit 3.07 Bitcoin. To date, this is the largest recorded in its dataset.
Glassnode’s report noted that “the dominance of on-chain transaction fees associated with exchange deposits also signalled urgency,” a point which further supports the argument that Bitcoin investors were seeking to de-risk, sell, or add collateral to their margin positions amid recent volatility for the market.
Over $3.15 billion in value moved into or out of exchanges during last week’s sell-off. This is the largest sum since the market reached its $69,000 peak in November 2021.
Brooks-Johnson will remain CEO until Rightmove posts its full-year figures in February 2023. The company has said the outgoing chief will help find a replacement to ensure a smooth handover.
Brooks-Johnson joined Rightmove in 2006. He became its COO in 2013, then its CEO in 2017. Previously, he worked as a management consultanr with Accenture and the Berkeley Partnership.
Following the news of Brooks-Johnson’s resignation, shares in the FTSE 100 were down as much as 7.1%.
In a statement, the resigning CEO said, “With Rightmove progressing well on its mission to make home moving easier and our strong trading from 2021 continuing into 2022, I have decided it is an appropriate time to seek a new challenge.”
Michael Kamerman, CEO of Skilling, shares his opinion on what stock you should watch this week.
Amazon
This week we are seeing Q1 earning results from 175 of the S&P 500 companies including big tech results from Microsoft, Google and Meta. Companies like Apple have thrived in the new year and reached all-time record earnings this quarter, continuing to make them an attractive investment for traders.
One to watch will be Amazon’s earnings report. Much like any other online-based service provider and seller, Amazon saw a boost in sales during the last two years due to Covid and lockdown affecting consumer behaviour. However, now that things have settled, recent UK sales reports are showing online sales falling noticeably across the board.
AMZN is currently down 23% from its November 2021 high and investors are keen to see whether their earnings show that things are picking up or slowing down.
Amazon’s 18% stake in electric vehicle maker Rivian last quarter helped “juice” their gains, however, Rivian’s recent struggles surrounding botched price hikes and supply chain issues may affect the big tech’s profitability, as Rivian is now consequently trading at near all-time lows.
Additionally, Amazon’s fuel and inflation surcharge come into effect on April 28th to combat rising prices. Alongside the unionisation situation, it has had to deal with in Alabama and now New York, this may likely affect stock prices.
On the offset, Amazon Web Services has been a key profit driver for Amazon in the last quarter with Amazon’s cloud sales growth hitting 40%.
In any case, investors will need to closely consider Amazon’s earnings in comparison to the other big tech giants to make a decision on their trading.
Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Netflix’s share price initially dropped close to 20% on the news that it had lost 200,000 subscribers globally during the first quarter. Wall Street had predicted the company would gain 2.5 million subscribers over the period. In the current quarter, Netflix believes it will lose 2 million global subscribers.
Netflix has blamed its sudden drop in subscribers on a range of factors, including increased competition, the cost of living crisis which is leaving households with less disposable income, and the ongoing conflict in Ukraine.
In a statement to investors, the streaming giant said: “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds.”
Major Forex players are usually financial institutions. For example, they can be banks, hedge funds or money managers. A relatively small part of Forex volume is taken by individuals. They are also called retail traders because they use Forex to make money on trading.
Forex trading is extremely important in today’s world. In fact, it helps to shape business, having effects on the world’s economy. But to benefit from foreign exchange, one needs to apply the right strategy. How to choose it? Let’s consider some of the best options.
Trend-focused approach
If you are looking for a simple yet reliable approach, you should try Trend Trading. As you may grasp from the name, this method requires you to trade in the direction of the existing trend. By the way, trends can be easily defined by the best forex EA 2022 or so-called expert advisors. It’s easy to use them and with their help, you can analyse not only trend direction, but also its duration as well as strength. All you need to know with this strategy is when to exit your current position so that you can lock in gained profits and limit your money losses.
Position-focused trading
In Position Trader, you’ll have to hold your position over a long period. Depending on the market situation and your skills, it can be from a few weeks to 2-3 years. So this is a long-term approach that requires a macro view. With Position Trading, one should ignore small fluctuations taking place in the market. This approach also relies on analytical data, such as moving averages as they help to determine the best entry and exit positions.
Range strategy
With this method, you need to consider support and resistance. Their levels are basically the highest and lowest ends that currency price hits before going in the opposite direction. Together these two make a so-called bracketed trading range, so that’s the reason why this approach is called Range Trading. And what tools are needed to implement this strategy? You should apply RSI and a stochastic oscillator for defining some overbought and oversold conditions.
News-centred approach
As said above, Forex is linked to the global economy. Foreign exchange is largely influenced by world economics. That’s why it’s essential to understand economic news and the impact it may have on currency pairs. With the News Trading method, you can predict both daily market movements and breakouts. In this case, you are supposed to rely on economic calendars and indexes. For example, you must consider CCI or the consumer confidence index as it defines in what direction price will move.
Swing method
This approach emphasises short-term price surges, so it’s a trend strategy that follows frequent price changes. Of course, small fluctuations may go against major trend directions. That's why Swing Trading requires a limited outlook. You may examine the foreign exchange market every hour or day instead of analysing overall trends. What’s more, you have to take quick action. By the way, traders also should hold their position overnight to benefit from trading.
Scalping
This is one of the most popular strategies used nowadays. Scalping is ideal for those who are not ready to take big risks. With this approach, you will have to conduct an ongoing analysis of price movements. Scalpers buy and sell currency pairs to shave small profits from each trade. For this purpose, they rely on the spread and collaborate with brokers to have access to lower spreads. They also need to use special tools to conduct technical analysis and recognise patterns, while taking into account economic events.
Final thoughts
So what’s the best foreign exchange strategy? It’s hard to give an answer that will be universal for everybody. In this article, we’ve considered some of the best approaches you can try today. It’s completely up to you what method to choose when using Forex. Most importantly, consider your needs carefully. Hopefully, this article will help you succeed in trading.
