In February, Tesla joined the exclusive club of companies that support Bitcoin. The car manufacturer managed to shock the stock market after they announced that they invested $1.5 billion into this cryptocurrency. In doing so, they expressed their full support for Bitcoin and everything that it stands for.
It goes without saying that this massive investment caused a lot of stir. That is exactly the topic that we wanted to discuss in this article. We’ll be taking a look at the impact of the Tesla involvement with Bitcoin and see whether it was good or not. Let’s dive into the details.
Tesla Accepts Bitcoin as a Payment Method
Shortly after they invested in Bitcoin. Tesla announced that they would accept this cryptocurrency as a payment method, which has massive benefits for all the users. The first and most obvious benefit is the fact that they will be able to use this cryptocurrency to purchase some of the best vehicles on the market.
The second benefit is the fact that Tesla is a major global brand that supports Bitcoin and thus contributes towards its stability. Just for the record, some other global brands that support Bitcoin are Microsoft, Shopify, Expedia, Overstock, Whole Foods, Starbucks, Wikipedia, and AT&T.
The Price Surge
The best outcome from their investment regards Bitcoin’s price, though. Just before the $1.5 billion investment was announced, Bitcoin was valued at around $47,000. After Tesla went public, Bitcoin’s value sky-rocketed and went over $50,000.
The massive surge attracted numerous traders who were more than happy to start trading with Bitcoin and make a profit out of the recent events. As you know, Bitcoin has a very high volatility rate and events such as these can have a massive impact on its price.
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Bitcoin trading sites subsequently recorded a massive rise in the number of registered traders. These are reputable platforms that offer great services to all registered players and have a very high profitability rate. Thousands of new people joined the networks and tested their skills to see whether they could make a profit out of the current Bitcoin situation.
Many Companies Followed in Their Footsteps
It is safe to say that Tesla’s investment proved to be extremely effective and efficient for both Bitcoin and the company. Why? Shortly after their investment, it was reported that Tesla earned $1 billion in profits. Not only that, but the rumours alone drove their stocks and allowed the company to bag $100 million.
So, many other companies decided to follow in their footsteps and invest in this cryptocurrency and integrate it as an accepted payment method. As for the reason why are they willing to trade with Bitcoin, it is because Bitcoin has numerous advantages over regular payment methods.
For starters, all transactions are instant. Due to the fact that banks are excluded from the process, the users can mine Bitcoins, thus process the transactions immediately. Not only that, but fees are also not charged. And finally, Bitcoin utilises a method called cryptology. Thanks to this technology, all Bitcoin users gain a certain level of online anonymity and boost their security.
These advantages are beneficial to both companies and customers as they are able to purchase products and services in a much more efficient manner.
Conclusion
As you can see, the impact that Tesla had with the Bitcoin investment was major and extremely positive. Not only did it allow the price of Bitcoin to rise, but it also contributed to its stability. Many other companies also followed in their footsteps, and thanks to the increased interest, experts believe that Bitcoin can rise as high as $100,000 by the end of 2021.
Online trading can be a profession or a hobby. Either way it helps to have sophisticated trading software that empowers you to know what's happening with the market in real time. Many traders lose money in the beginning because they haven't learned about the tools that can help them weigh risk with reward. Here's a guide for choosing the right electronic trading technology.
Purpose of Trading Platforms
Trading platforms are computer systems designed to provide traders with analysis along with tools for evaluating the market and making online transactions. As financial researcher Gartner notes on its website, "Trading platforms directly or indirectly facilitate the placement of orders for financial products with another financial entity or intermediary over a network." If you want to read reviews on trading platforms, there are products that can assist you in your research.
Evolution of Trading Platforms
The first electronic trading platforms were used by some brokers in the 1970s over private networks. In this early period, trades weren't executed in real time. The first online trading platforms aimed at retail traders appeared in the early 1990s. The internet became a global sensation by the middle of the decade as online trading became part of the frenzy of the dotcom boom.
In the 2000s, online trading was popularised by CNBC host Jim Cramer, a former hedge fund manager who mixes humor with stock picking. His emphasis has been on short-term swing trading and portfolio diversity. Day trading became trendy in the new century, but many day traders were wiped out due to not practicing risk management or having all the relevant market data at their fingertips. Since then high-frequency trading software has become part of the equation for top pro traders.
Level 1, 2 and 3 Quotes
Understanding the three different levels of market quotes is essential to gaining an edge as a trader and choosing the appropriate software. Most of the stock prices published on popular websites are Level 1 quotes from a system that delivers basic market data such as the best national bid and ask prices for any security. This level is often used by long-term traders who don't care much about daily price fluctuations.
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Levels 2 quotes provide more comprehensive market information, which is why it's the preferred choice of day traders and swing traders. You get up to ten bid and ask prices, enriching you with insights on which direction the market is leaning at any moment in the trading session. Level 3 provides even deeper information, but it's mostly used by brokers and market makers. This level provides up to 20 best bid and ask prices.
Consider Your Trading Style
Professional traders usually develop trading styles that reflect their personalities in terms of how they approach risk management, market research, trade execution and analysis. Each trader has their own unique style, so think about what type of trader you want to be. If you just want to make occasional trades, all you need is a platform that connects with Level 1 quotes. But if you want to make trading your full-time career, you'll need Level 2 quotes.
Ask yourself if you want to immerse yourself in vast amounts of market data on a daily basis. If so, invest in trading software that delivers Level 2 quotes. The more data you analyse, the greater the edge you'll develop over traders who rely on minimal homework and good luck. Another dimension to successful trading is predetermining how you will exit a trade, depending on how the price moves.
Trading platforms commonly provide tools for making various types of market transactions such as buying or shorting stocks. Many pro traders use limit orders to set their own prices and wait for the market to hit their targets. Market orders pose more risk as they are executed at the current market price. Ideally, the software should be seamless, user-friendly and provide up-to-the-second market data.
Conclusion
While being a profitable trader comes down to entry and exit strategies, it helps to conduct your market research, transactions and analysis all on one trading platform. The key to finding the right platform is evaluating how much time you want to devote to participating and studying market activity.
As you enter retirement, you may feel as though you are already set for life. With all the money you have saved and the pension checks you will be receiving, managing your money should be the least of your worries. However, investing doesn't end with you hanging up your boots. It's a process that continues well into the future. After all, you still need to prepare for any contingency that comes your way and, more importantly, build a fortune you can pass onto the next generation.
Money doesn't keep on flowing when you retire, so it's important to put your savings and pension funds to work. Here's a guide to help you along this path towards gaining financial freedom and stability as well as giving your loved ones something they can inherit.
Set clear financial goals
What will you want to achieve once you have retired? Will you travel the world? Will you move into a quieter and healthier community? Everyone has a clear vision of what they are going to do during retirement, but living the good life shouldn't be the only thing in mind.
Financial stability and building enough inheritable wealth should also have a place in your list of goals during retirement. Your main goal here is to maximize whatever fund sources you have. From this, it will be easier for you to develop a sound investment strategy that works for you in the long run.
Start early with a risk-proof plan
Sound financial planning should start long before you retire. As you enter the last years of your career, you need to take this time to work out your financial plans for after. You may have already saved enough cash in your retirement account, but you need to know how to allocate and spend them on stable investment vehicles.
Sound financial planning should start long before you retire.
Why is it important to plan early? The answer is simple: Inflation. As you save money in your retirement savings, these funds will lose value over time, depending on current and forecasted economic situations. In other words, your retirement money is at the mercy of the economy at-large. You can’t just keep cash in the bank. You should also look for investment vehicles that are guaranteed to grow your cash.
It’s always sound advice to do your research as early as possible, compare potential investment options, and come up with a financial game plan that serves as a hedge against economic volatility.
Avoid getting too aggressive
As a retiree, the world is your oyster! You can do whatever you want with the wads of cash you have. While you may have the freedom to choose an investment option that’s supposed to generate high yields, being too aggressive sets you up for failure.
In today’s financial environment, the best rewards often go towards strategic players — and not players who go all-in. Financial advisers will tell you that as a good rule of thumb, you need only to go for investments that provide enough cash flow to keep you within your goals. The worst thing you can possibly do is to invest all your assets without maintaining enough reserves for future expenses. You know exactly what happens if you put all your eggs in one basket.
Diversify
It matters a lot to know where you invest all your retirement in. If you started early with retirement planning, you may include stocks, bonds, and other securities in your financial strategy.Then again, building a solid portfolio shouldn’t rely heavily on securities as these are highly vulnerable to volatility. It’s sound advice to invest in things you are familiar with, but narrowing your strategy to a single asset class won’t secure you for the long-term.
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Diversification is still an effective strategy for reducing risk and limiting your exposure to economic disruptions. Along with securities, you should also look towards alternative investments that work well against uncertainty. These passive income options include real estate (specifically, commercial properties and rental housing), trusts, and qualified opportunity funds. You can also look into precious metals, variable annuities, and even cryptocurrencies like Ethereum and Bitcoin.
When it comes to securing your future as a retiree, it pays to broaden your investment horizons. Still, before you start diversifying your portfolio, take time to study each vehicle and the ways you can maximize them.
Avoid the “hype train”
When it comes to investments, people will always flock to where influencers go. For someone who is new to investing, keeping up with other investors might seem like an effective way to manage uncertainty. However, putting all your assets in hyped-up stocks will only set you for a very hard drop if these stocks result in bubbles.
As a retiree, you wouldn’t want to jump into the hype-train thinking it’s a sustainable way to maximize your retirement funds. Nothing ever comes out of being too aggressive. You may have a lot to spend in your retirement, but overlooking certain details and making emotional decisions in the process spells trouble. It only increases the risk of losing everything you have as well as everything you are supposed to earn during retirement.
At the end of the day, planning for your retirement helps you build a more stable future even in the midst of economic disruption. To live comfortable well into the later years of life requires foresight, wisdom, and sound planning.
Finance Monthly hears from Giles Coghlan, Chief Currency Analyst at HYCM, on what UK investors should keep their eyes on as June approaches.
As pubs, restaurants, shops and gyms all over the country begin to re-open their doors, all eyes are on the UK’s post-pandemic economic recovery.
For one, there is a sense optimism throughout the country. The rollout of the COVID-19 vaccine is on course (half of UK adults have now had at least one jab) and social distancing measures are being relaxed. Unemployment has fallen at the start of 2021, while inflation is holding steady.
As with any major societal change, all these things are naturally impacting the financial markets. The construction industry, for example, is experiencing strong growth as a backlog of projects spark back into life, and we can expect to see similar trends in other sectors as more retail, hospitality and leisure establishments re-open.
With all this in mind, here are some key themes and developments that investors should watch in the months ahead.
Stock markets
Throughout the pandemic, the so-called FAANGs stocks of Facebook, Apple, Amazon, Netflix and Google have been central to the US stock market’s record bull run. As investors have pumped huge sums into global equities, the tech giants have been among the greatest beneficiaries of the stay-at-home economy.
Given that stocks have generally been on a great run higher since March last year, with record highs and strong returns, investors must now seriously consider just how sustainable this pace is. In particular, traders and investors should watch for a seasonal shift, which might mean that these stocks lose their bite. One possible scenario could see the old adage “sell in May and go away” ring true, with the arrival of the summer months prompting investors to exit their stocks.
As investors have pumped huge sums into global equities, the tech giants have been among the greatest beneficiaries of the stay-at-home economy.
Further, as more lockdown restrictions are removed, naturally, society at large will be less dependent on tech to go about our lives as normal. As such, it will be interesting to see how tech stocks will fare throughout this period, and whether they become a less appealing prospect to investors.
Meanwhile, traders should also monitor the performance of stocks in the retail, hospitality, retail and leisure industries as the UK progresses on its roadmap to ease the lockdown. Companies in these verticals could achieve impressive growth when life returns to something resembling normality.
Gold
As the US economy begins to awaken, US bond yields have been on the up, meaning that Gold Exchange Traded Funds (ETFs) have continued to fall. This is a trend that should please the Fed, and is reflective of a far more optimistic outlook.
Particularly as expectations of life as normal inch closer, should the US economy continue to improve, rising yields will no doubt put further pressure on gold, which has already seen one of its worst starts to the year in 20 years.
Ordinarily, the beginning of the year is a period of strong demand for the precious metal, with the Chinese New Year usually attracting gold buyers. From a seasonal perspective, for the past ten years, gold has been flat between April and June; with the 2013 taper tantrum, gold lost nearly 20% between March and September alone.
Consequently, traders should watch for a possible sharp sell-off in gold should the Fed begin to talk about tapering.
BTC and cryptocurrencies
There has been strong media attention on cryptocurrency in recent months, with talk of Bitcoin garnering significant headlines. This is unsurprising, given that Bitcoin’s market capitalisation is now valued at a remarkable $1.2 trillion, putting the cryptocurrency ahead of Mastercard, PayPal and Visa combined.
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Even accounting for a recent blip, the crypto boom is noteworthy. It will be interesting to monitor how long these gains will continue.
In recent weeks, it is important to note that Bitcoin’s latest valuation came in at the same time as Coinbase launched an initial public offering – making it the first firm of its kind to do so. The arrival of Coinbase now offers many equity investors a straight bet into the cryptocurrency landscape, which could be met with strong gains in Bitcoin.
No doubt, this is a significant event in the busy cryptocurrency market – one that investors and traders should keep up with in the coming months.
Bitcoin trading has become the main occupation of many people around the world. Some statistics have shown that there are over 5 million users in Bitcoin’s network in 2021. More so, approximately 100,000 people from around the world have managed to become millionaires thanks to this cryptocurrency.
These days, Bitcoin is writing history as its price went over $50,000 and hasn’t dropped down in a while. It is safe to say that this value is now the stable rate of Bitcoin from which many traders can make a lot of money. Since new traders are joining the Bitcoin network with each passing day, we decided to name a few guidelines that every novice trader should take into consideration when they decide to trade with Bitcoin. Let’s check them out.
The Volatility Rate
Bitcoin has a very high volatility rate. That means that its value fluctuates very often and changes with each passing day. Let’s take the Tesla investment as an example. After Tesla invested over $1.5 billion in Bitcoin, its price surged by over $4,000 in just 3 days. The volatility rate is one of the biggest challenges that traders face in their quest for making the maximum possible profit with Bitcoin.
Trading Sites
While it may be impossible for Bitcoin traders to capitalise on future fluctuations of Bitcoin by themselves, trading sites are the platforms that will be able to help them. Some of the most reputable sites of this character feature an advanced service that will indicate when is the best time for traders to sell their assets.
Let's take Bitqh as an example since this is one of the most reputable trading sites on the planet. The Bitqh official website uses an advanced AI system that collects all the data about Bitcoin. The data is then analysed and the AI system can make pretty accurate predictions on the future fluctuations of Bitcoin. The daily profitability rate at this site is huge, which is more than an indicator of how successful their software is. Additionally, it has thousands of registered users from all around the world.
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These predictions are beneficial tools that traders can use to maximise their profits. In short, choosing a reputable trading site like the one we just mentioned can make a lot of difference when it comes to making money.
Halving Events
Halving events are one of the most important processes that take place on Bitcoin’s network. Usually, they are held every 4 years, or after 210,000 Bitcoins have been mined. What is their purpose? They control the flow of Bitcoin on the market and make sure that it is not flooded by them.
During halving events, it becomes very difficult to mine Bitcoins. Their circulation is cut in half. The reason why these events are important for traders is that they often lead to price surges about a year to a year and a half after they finish. So far there have been 3 halving events (2012, 2016, and 2020) and all of them led to price surges.
Long-Term or Short-Term Investment
Basically, there are two types of investments in Bitcoin – long-term and short-term. Depending on Bitcoin’s fluctuations, you will need to make an educated decision on which approach should you take. Short-term investments are done when Bitcoin is expected to plunge in value. These investments allow you to make a quick profit and bail out before the cryptocurrency starts dropping in value.
On the other hand, long-term investments are done when Bitcoin is expected to rise in the near future. The only downside to this type of investment is that you may wait a longer period before you see the fruit of your labour, but the profit will be much higher than the one of short-term investments.
2021 has seen a huge tie in of key areas including our biggest foe – COVID-19 and one of the most current trending terms, Net-Zero. Of course, with most of us obeying the rules of lockdown, there has been a huge online presence for retail and of course, NFTs. Unfortunately, some of my most compelling investments and eyes on companies are early-stage, not listed, so I cannot add them to this list. However, I will be writing up soon on the ones to get in early if you are like me and like a diverse early-stage portfolio.
With digital art selling for which some would consider ludicrous amounts of money and major sports leagues throwing collector cards at any platform they can, will NFTs be the dot-com bubble that led to so much loss only two decades ago?
Personally, I have been curve balling away from art and music NFTs for a little while. I may kick myself in the future, but I am sitting back and waiting for things to settle a little or at least, a set of platforms and standards which would make a standard for at least ensuring a real value and security in my collection. However, I have been watching the game world and the big things happening on the so-called “metaverse”.
I mentioned Animoca in a previous article, and voila, Sandbox has sold vast chunks of virtual land recently, propelling the SAND coin up the ranks.
This month, I have been concentrating on all those goodies which have been developing for the last year and also the online gaming markets, along with the retail trends which have really changed a great deal during our prison sentences.
So, let’s start with retail. I tip my hat to Debenhams at this point – I have great memories of visiting the stores but unfortunately, way too many things went wrong for them. Goodbye to a fond memory!
PayPal
CEO Dan Schulman has made public statements recently into the payment giant’s movements, which have tied in very nicely with the pandemic and people’s moves to digital payments. Over the last year, I have used little cash, with my preferred Apple Pay taking precedence. Even the Royal Mint seem to be in a panic over the decrease in cash use.
However, this is not the only thing making the stocks be eyed again. Around three years ago, I advised on the changes to retail when looking at the Battersea Power Station project and the vast movement to experiential shopping behaviours of consumers. The mass floor space is becoming a thing of the past and shoppers are happier to buy and receive goods the next day. PayPal payments can be a big driver behind this and if we are moving to a cashless society, secure payment methods are key. PayPal has developed a great deal of technology to protect the buyer and my bets are on them targeting further into the physical purchase markets.
Next up – online gaming. The big players are really pushing hard now, very likely due to the demand on games from the stay-at-home players, who are wanting more from the experience. Even colleges in the US are designing courses for gameplay and the next Olympics will very likely see full-scale digital Olympians too.
Epic Games
This powerhouse is the creator of the Unreal VR engine and is certainly taking the product very seriously. It’s not only the gaming world this covers, but also the whole CGI arena and the Unreal engine has just empowered MetaHuman, the latest and rather scary fully mapped human creation engine. Epic has not gone for their IPO yet, but I am waiting, ready to pounce when they do. However, if you are wanting to get in on the game (excuse the pun), then you can buy a bit of Tencent Holding (TCEHY), which has a stake in Epic right now.
Epic is also taking the Metaverse world very seriously and if executed correctly, rather than trying to own the whole thing, the Unreal engine could certainly be a standards contender across the whole verse.
Now it’s time to reach for the stars. SpaceX is firmly on my radar, especially with the Starlink satellite-based internet service rolling out. I hear you say: “Hey they are not even close to IPO”, and you would be right. I imagine it will happen in 2023 when Musk presses the button. However, I have a trick up my sleeve.
Alphabet Inc.
Okay, what on earth has Google got to do with SpaceX? Easy, they invested into 10% stock when it was an infant getting going. By investing in Google, you can bypass the huge overinflation of the upcoming IPO and sit on Google’s early seed investment, which I believe is still around 9%. Buckle up and become part of the space race.
As a final thought, I move to MedTech, which is one of the areas I consider to be a present and future requirement highlighted during COVID. Much of the research and development which took place can be used to continue the fight against future viruses and even other medical issues.
Quidel
Apart from other immunoassays, Quidel received rapid emergency-use authorisation from the FDA for their COVID-19 antigen test. Unlike many other tests, theirs is designed to test asymptomatic individuals. This alone is something to propel a stock, but they are also using a great deal of known research from previous tests to provide key medical test solutions into the future.
What we do know with MedTech, is that it is going to play a much more important role in our future daily lives. The pandemic hit us hard, but there almost certainly will be other viruses and infections which will haunt us and these companies are key to far more rapid solutions than we probably gave them credit for.
Next time, I will be looking into those companies which could have made a completely different outcome to the COVID-19 pandemic in the field of vastly more intelligent tracking and tracing and even predictions of further waves of virus mutation. There was a complete lack of interoperability across the world when it came to information and traceability. Red-listing countries post avalanche of people movement, quarantines with very poor intelligence, zero prediction of further waves. It is time for a change and I am a firm believer in a global information interchange. People may scoff at this, but whilst reading this article, you are using the world’s largest data interchange platform - the Internet.
Finally, I am watching one of my own big bets, EyA – which may be listing in the not so distant future. Fingers on the button with this one, that is for sure!
*NO INVESTMENT ADVICE
The content is for informational purposes only and should not be construed as financial advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, or offer by Graham Norton-Standen, HIG, Finance Monthly or any third-party service provider to buy or sell any securities or other financial instruments.
Finance and the banking sector, more often than not, get credit for, or have the infamy of being the destroyers of the planet, rather than a force for good. Corporate social responsibility initiatives make small gestures, very frequently for the sake of public relations or to appease a certain contingent of investors, but banks and the financial services industry are still very much in the business of making money for their executives and shareholders at all costs.
Because the global economy and political order is so dependent upon finance, however, rather than being an unavoidable destroyer of the planet - in fact, very much to the contrary - finance is actually, perhaps uniquely, positioned to save it.
Investing in Renewable Energy
Many of the more sustainable banks and green energy funds around the world already invest a significant amount in renewable energy. The world’s biggest and most influential banks, unfortunately, continue to put a tremendous amount of their capital into fossil fuels because it remains profitable. Barclays, BNP Paribas, Chase Bank and Goldman Sachs are all key players in international finance and they are all, for the time being, inextricably linked with the perpetuation of the global fossil fuel industry.
Helping Developing Countries Revamp Agriculture
The World Bank and other development banks around the world are already focused on and investing in ways to make agriculture more efficient and sustainable in developing countries. Climate change, population grown and accompanying land use changes are all putting strain on not only the ability of countries to feed their populations, but also on the surrounding ecosystems and biodiversity.
From international finance’s perspective, investments in sustainable agriculture aren’t just good for the environment, but they can also have a positive impact on the bottom line. Investment in better agricultural techniques is not only something that will help the global south, but stands to have significant positive economic and environmental impacts in northern countries as well.
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Capitalise Domestic Waste Management in Developing Countries
90% of waste is openly dumped or burned in low-income countries. This inevitably means that much of it either ends up polluting the earth, becoming a major health hazard for the surrounding, largely poor communities, and making its way into rivers and oceans, contributing to the degradation of marine ecosystems, threatening commercial fisheries, tourism industries and much more.
Finance could make it part of their corporate social responsibility mission to help provide governments and communities with the means to better handle solid waste and it could be done in a way that reflects both a social and environmental conscience, as well as an interest in a positive return on investment.
Help Develop a Market for Ecosystem Management and Restoration
It is difficult to quantify the economic value of a rainforest or a coral reef. Difficult, but not impossible. The worth of a healthy reef or forest can be measured in its contributions to local livelihoods and economies through tourism and fishing; the amount of carbon it captures; and the protection it offers against land and ocean-based natural disasters like soil erosion, coastal erosion and tsunamis, among other ways. Investments in projects which seek to repair and preserve don’t need to be thought of as purely philanthropic ventures, but sound business investments as well.
Conclusion
Reorienting and redeploying significant amounts of international capital, controlled and managed by the world’s largest banks and financial institutions, will require both a philosophical shift as well as the legitimisation of the idea that saving the planet is something that can and perhaps should be done with a profit motive in mind. The above examples are by no means exhaustive, but they represent some of the most meaningful things we, as a species, could do with the considerable amount of wealth our economic activities generate every year.
Every investor begins their first portfolio nervous and not knowing very much. If you have a desire to learn the basics, however, and are committed to constantly improving your knowledge base, over time you will have a portfolio of stocks (and perhaps other financial instruments) that you are happy with and confident in. Below are four tips for building your first portfolio.
Consult the Experts
While you should always do your own due diligence any time you invest your money, there is always someone with more information and better insights than you out there. When you are just starting out and building your portfolio, anyone who has been doing it longer is very likely someone you could stand to learn a thing or two from.
Thanks to the internet, there are now more options than ever to see inside the minds of some of the world’s most successful and experienced investors, either by following them on social media or subscribing to their analysis, advisory and stock picking services. Even if you don’t follow their advice all the time (or at all) you gain valuable insight into how they evaluate their picks and how you can apply their metrics and criteria to your own picks moving forward.
Determine Your Appetite for Risk
When investors and financial services professionals talk about someone's appetite for risk, what they are referring to is how comfortable an investor is with the risk that they might lose some or all of their capital. A wide range of factors determine what your appetite for risk is or might be. Your age, experience, income and ability to handle the stress of investing all come into play.
Spend some time pondering these things when deciding on what assets you want to include in your portfolio. An older person nearing the age of retirement is likely going to be unwilling to make the same kinds of risky bets a single, gainfully employed 30-year-old is. A person investing some of their life savings is going to be more worried about taking a loss than someone investing their disposable income. Different stocks come with different risks.
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Diversification
One of the fundamental rules of investing and building a portfolio is that you want to diversify your investments across a variety of asset classes and industries so that you are not overexposed to the misfortunes of any particular one. If your portfolio is tech-heavy, or overly weighted with a single precious metal, a market downturn in either of these areas will have a disproportionate effect on your total holdings. If you are just starting out, it is a good idea to begin by reading some of the many popular books explaining these concepts.
Explore the Simulators
While the modern markets are almost unrecognisably more sophisticated and complicated than the pre-digital-era ones were, the major upside of just starting your investor journey in the 21st century is that you have more information and learning opportunities than ever before in the palm of your hand. One of the best methods to get a feel for investing and how to start putting together a portfolio is to use one of the many investment simulators out there. Most are completely free and when you sign up for a brokerage account with a financial institution, they usually have their own proprietary simulator that will give you fake money to play around with, allowing you to observe how investments work and behave in real-time.
Conclusion
Once you build your first portfolio, it will rarely be set in stone. Over time, your appetite for risk will change, your confidence in your ability to read and anticipate the market will improve and your knowledge of general investing and financial analysis principles will allow you to make more informed decisions about what to include in and exclude from your portfolio. Keep the above tips in mind when starting out and create a sound portfolio you are happy and comfortable with.
Bitcoin and Ethereum fell during Tuesday trading, extending a price decline that began last week, while joke cryptocurrency Dogecoin rallied further after a record surge.
Bitcoin was down 4.6% by 9.20 AM in London, while Ethereum was down around 5.3%. The world’s two most highly valued cryptocurrencies were trading at $54,763.19 and $2,134.70 respectively.
Meanwhile, Dogecoin was up 18% at $0.4075, a jump that coincided with social media attention on 20 April. Supporters of the cryptocurrency are celebrating the date – which is also International Weed Day – as “DogeDay” and are urging fans to buy up the token in a bid to raise its price to $1.
The price of Dogecoin has risen by more than 400% in the past week and by more than 5,000% since the beginning of the year, a rally that has given it the fifth-highest market cap among cryptocurrencies. The total value of its tokens in circulation is now over $52 billion.
Dogecoin has also benefited greatly from the light-hearted support of social media celebrities such as Elon Musk and Snoop Dogg, whose joking references to the token on Twitter preceded an 800% price jump in January.
"Dogecoin has become the new GameStop, with frenzied trading potentially going to deliver a bloody nose to novice investors,” said Nigel Green, CEO of deVere Group.
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Green also suggested that the Dogecoin push is being pitched as a battle of a community-backed cryptocurrency versus existing crypto giants like Bitcoin, echoing the GameStop trading frenzy that took on a narrative of underdog retail investors versus established Wall Street insiders.
What has been happening with the dollar lately? If that question is on your mind, you are not alone. In fact, many traders, investors, economists, politicians, and international finance enthusiasts have been scratching their heads since the last week of March this year. As the first quarter came to a close, there was nearly universal shock at how well the USD had performed, both overall and compared to the dire expectations set out in late 2020. As every forex trader knows, it's easy enough to get an accurate, current read on the strength of the greenback, or any other nationally denominated form of money, by using a strength meter.
Meters offer a clear view of how well a given currency is doing against all its rivals. For instance, you can view the currency strength meter on your trading platform and see how well the yen, euro, USD, or any other currency is doing in comparison to all the others. Another gauge of performance is the DXY, also known as the US-Dollar index. For example, on the DXY, the value of the buck peaked last year at just over 100 in late May and then dropped all the way to 91.7 by 31 December. The daily value rose from 89.9 on 1 January to 93.3 on 31 March, ending the three-month run-up in good shape.
All the Predictions Were Wrong
Nearly every major financial institution and organisation that makes official predictions about the value of the USD was dead wrong for the first quarter of 2021. What happened, and what were the estimates? You didn't have to spend more than a few minutes checking a wealth of financial media sources in late 2020 to learn that the dollar was headed for a terrible first quarter of this year. Then, it turned out that all the Wall Street prognosticators were way off. The safe haven currency stages a comeback of sorts and has been headed upward in value all through the first three months of the year.
Here are some revealing statistics in that last year, due to COVID-19, a contentious presidential election, and several other factors, the greenback took a huge hit for the 12-month period, notching down by almost seven percent based on index values. But in Q1 of this year, the currency moved up by a little more than 3.5%. Overall, in about 12 weeks, almost half of last year's losses were recouped. And that performance marks the buck's best Q1 surge in three years. Since the big run-up, though, the USD has retreated a bit, but it's still looking strong a few weeks into Q2.
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What's Different About 2021?
One thing that can pull down the value of the greenback is a worldwide economic recovery. When that happens, major investors no longer feel as if they need to avoid investing capital into a safe bet like the US dollar. So, when the United States far out performed every other national post-COVID recovery, a huge chunk of that safe keeping money remained parked in USDs.
The published assumptions of banks, other governments, and Wall Street analysts was that the currency would fall by about 3% between January and late March. The first difference is that 2021 is not 2020, and the US beat the betting line. Bottom line, instead of a 3% fall, the world's default denomination rose by 3.5%, which means the guessers were wrong by 7.5% in total. In the world of currency values and major financial institution predictions, being that wrong is akin to missing a football bet by 100 points. It just never happens. But it did happen.
What Happens in Q2, Q3, and Q4?
Many of the large international banks are sticking to their guns and continuing to predict bad times for USD for the remainder of 2021. Many base their expectations on an assumption that non-US nations will finally begin to fully rebound from COVID-induced backsliding. That could mean, so the thinking goes, that the dollar as a safe haven won't be nearly as attractive as it is now.
What to watch? Investors should keep their attention on three things. First, see how countries like China, Japan, Australia, and the UK recover from the pandemic, particularly in terms of manufacturing and durable goods corporate performance. Second, watch the DXY on a daily basis. The 50-day moving average of the index reveals a big-picture view of the USD. Finally, check in with the official national banking blogs to see if their estimates about the near-term future of the US currency changes from week to week.
Coinbase, the US’s largest cryptocurrency exchange, reached a valuation of over $100 billion on its first day of public trading on Wednesday.
The company was valued at $99.6 billion when trading opened, with stocks priced at $381 apiece. This price would later fall to $328.28, but not before reaching the $100 billion milestone.
Coinbase’s stock market debut, and the implications it creates for cryptocurrencies becoming part of mainstream finance, spurred enthusiasm among crypto investors. Bitcoin reached an all-time high of $63,000 on Tuesday ahead of the platform’s listing.
“Today is a big moment for @coinbase as we become a public company,” tweeted Coinbase co-founder and CEO Brian Armstrong on Wednesday. “But it’s also a big one for crypto.”
The value of Bitcoin and other cryptocurrencies has soared over the past year as major firms including Tesla, Mastercard and PayPal have revealed plans to incorporate digital tokens into their business models. Bitcoin itself rose 300% last year and has continued to climb since January.
Smaller currencies have also benefited from the surge. Joke token Dogecoin has risen over 70% in the past year, reaching 13 cents per coin.
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Coinbase was founded in 2012 and had more than 56 million users at the end of March 2021. It also held around $223 billion in users’ assets.
The firm’s market cap has increased more than tenfold since 2018, when investors in a private funding round valued it at $8 billion.
JPMorgan Chase & Co said on Thursday that it will commit $2.5 trillion towards sustainability and development initiatives over the next decade.
$1 trillion of the pledged funding has been earmarked solely for investment in green projects, including renewable energy and clean technologies.
The $2.5 trillion target for investment, which begins in 2021 and will run through to the end of 2030, will also be concerned with facilitating transactions to support socioeconomic progress in developing nations.
In 2020, the bank said it facilitated $220 billion worth of transactions that it designated as supporting sustainable development, which included $55 billion in green initiatives. The total exceeded its $200 billion target for the year.
Last week, JPMorgan CEO Jamie Dimon issued a letter to shareholders naming climate change as one of the world’s biggest issues alongside poverty, economic development and racial inequality, which he said the bank was engaged in trying to solve.
“Reducing greenhouse gas (GHG) emissions — the main cause of climate change — requires collective ambition and cooperation across the public and private sectors,” he wrote.
ESG investment rose to greater prominence in 2020, with many asset managers launching funds to capitalise on the wave of interest. JPMorgan launched its first green ETF in December 2020 and in February it revealed that global sales of “green bonds” might hit $150 billion this year.
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However, some climate organisations remain concerned that JPMorgan is not doing as much as it could to support climate action. In 2020, the company’s total fossil fuel financing came to $317 billion, greater than any other major US bank.
