Giles Coghlan, Chief Currency Analyst at HYCM, explores the developing impeachment story and what it portends for markets in the US and around the world.

Donald Trump has become the first president in US history to face congressional impeachment twice over. Following a controversial rally that resulted in his own supporters storming the Capitol building on 6 January, it seems he has now lost the support of the Republican party. This is significant, as it now means he is vulnerable to an indictment from the Senate.

You would be forgiven for expecting such unprecedented political developments to have knock-on effects throughout the world’s financial markets. To the contrary, however, the response has been muted, which came as somewhat of a shock for some.

As a matter of fact, US stocks actually saw record highs in the days following the DC rioting. The Nasdaq closed above 13,000 points for the first time in history on 7 January, a positive reaction to the Senate’s confirmation of the 2020 US presidential election results. On top of this, the S&P 500 and Dow Jones indexes also witnessed impressive gains on the same day.

Having analysed market movements over the past week, there are signs that these rallies are the result of the US finally confronting its own deep political divisions. Congressional representatives are no longer defining themselves by their support, or opposition, of the president. This means that substantial aid spending and stimulus investment can now be approved through both legislative houses. Markets have responded well to the details of President Biden’s spending plans thus far as well as the gradual roll-out of COVID-19 vaccines; signifying that the end of the pandemic now lies within sight.

As the Senate begins preparations to formally indict Trump however, potentially barring him from holding federal office in the future and depriving him of many luxuries normally afforded to former presidents, could future impeachment-related market upsets be on the horizon?

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At present, it’s almost impossible to say for certain. The S&P 500 advanced to 3,205.37 points on 19 December 2019, following Trump’s first impeachment hearing; indicating that financial markets are generally apathetic to impeachment developments on the whole.

Although the circumstances have since changed, with the Democrats' control of the Senate meaning that impeachment can now obtain bicameral support, Joe Biden’s incipient inauguration means that any outcome will have only minimal effects on the US presidency or the global economy.

Of course, these recent gains could be challenged if the first month of Biden’s presidency is beset by mass rioting from Trump’s most ardent supporters. However, even if such mass protests do take place, investors the world over fundamentally recognise the US as a country of law and order; where civil unrest never becomes widespread and is normally quickly contained.

Nonetheless, traders and investors must take note of any potential risks to their portfolio’s performance in 2021. Given how eventful 2020 was, it seems likely that there will be some unexpected political developments that could take the financial markets by surprise this year. As such, investors must be prepared for any eventuality.

In the world of investing and trading, you never know what the news each week can bring. Investors must prioritise meticulous market research and having a plan for potential market shocks in 2021, or else their portfolios could be taken for a spin when the next big political story comes along.

European and US markets saw a surge on Wednesday as Joe Biden was officially sworn in as the 46th US president.

The Dow Jones, S&P 500 and Nasdaq each hit new records as markets closed. After making gains on Tuesday as Treasury secretary nominee Janet Yellen urged Congress to “act big” on economic stimulus, the S&P 500 ended 1.4% up in a closing record.

The tech-heavy Nasdaq index was also boosted 2%, aided by a jump in Netflix stock as the company suggested share buybacks to come.

European stocks opened higher on Thursday morning, with the FTSE 100, CAC 40 and DAX respectively gaining 0.4%, 0.% and 0.6%. US markets also appeared ready to hit further peaks, with Dow Jones, S&P 500 and Nasdaq futures respectively up 0.2%, 0.3% and 0.6%.

Asian stocks also hit record highs overnight. Japan’s Nikkei rose 0.8%, while Korea’s Kospi rose 1.5% and Chinese blue-chip stocks added 1.75%.

Traders’ optimism was owed in large part to Biden’s proposed $1.9 billion stimulus package and was probably not hurt by his inauguration speech focused on “bringing the country back together”, according to CMC Markets UK’s chief market analyst, Michael Hewson.

The stimulus package would bring a raft of measures intended to support citizens and businesses impacted by the COVID-19 pandemic, with the issuing of $1,400 payments to eligible persons being its flagship feature. Also on the table are a temporary increase of tax credits, subsidies for health insurance premiums, and a new grant program for small business owners separate from the existing Paycheck Protection Program.

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The newly inaugurated president has also stated that a second spending plan will arrive “in the first few weeks” of his term, likely introducing new measures to create jobs and reform infrastructure.

President Joe Biden was officially inaugurated on 20 January, offering a dramatically changed political outlook from the outgoing Trump administration. Equally significant, Biden enters office buoyed by a “blue wave” that has seen Democrats gain majority power in the Senate while retaining a majority in the House of Representatives, granting the party effective control of both the legislative branch and the presidency for the first time since 2011.

Though the new administration will be faced with numerous economic challenges, it will have the political clout to enact drastic policies to tackle them. What does this mean for investors on the hunt for prime stocks? What are safe bets, and what bubbles may soon burst?

Green Energy

“Build Back Better” has been a common slogan ever since the 2020 campaign, broadly summarising the new administration’s aim for the US economy. The Biden-Harris campaign website specifies the creation of “an equitable, clean energy future” as a key plank in this. With the spectre of climate change becoming an ever-greater threat to the global economy, we can expect to see a good deal of renewed attention given to green business.

Naturally, this is good news for companies with a focus on renewable energy. Investors may soon see positive movement in NextEra and other utilities with wind and solar assets. Clean energy system manufacturers such as First Solar and Emphase Energy are also worth a look – as are electric vehicles companies. With Biden having voiced ambitions of creating 1 million jobs in the auto sector and incentivise EV production, the future looks bright for the likes of Tesla and Workhorse Group.

Infrastructure

Alongside Biden’s promises of greater green energy investment is a pledge to invest comprehensively in American infrastructure. Roads, bridges and energy grids are all noted as areas of concern that will soon see government investment.

With the spectre of climate change becoming an ever-greater threat to the global economy, we can expect to see a good deal of renewed attention given to green business.

A natural beneficiary of this focus on infrastructure (if Biden is serious) would be construction companies like building materials supplier Martin Marietta and equipment maker Caterpillar, both of which were heavily impacted by the onset of the COVID-19 pandemic but have since rebounded. It’s a telling portent that the Global X US Infrastructure Development ETF (PAVE), which tracks some of the largest industrial, construction and transportation companies in the US, saw a rally in the week of the election and an overall jump of 26% in the past three months.

While the optimistic rumours of a big infrastructure deal may not come to anything under the new government, telecom providers in particular can expect a boost from Biden’s promise to work towards universal broadband. AT&T, Comcast and Verizon, among other big players, can be expected to make significant gains.

Big Tech

Tech giants like Amazon, Google and Facebook occupy a strange position in the US economy. Though their market values have never been higher, and they have managed to keep up consistently high performance during the COVID-19 pandemic while other businesses have foundered, politicians from both sides of the aisle have managed to find an opponent in big tech.

Now, with majority power in Congress, Biden and his party are in a position to heavily regulate or even break up the “Big Five” of Amazon, Apple, Facebook, Microsoft and Alphabet. Notable Democrats like Elizabeth Warren have come out in support of breaking up tech giants; the Democrat-led House antitrust committee has found that the Big Five “hold monopoly power”. Biden himself has publicly criticised Facebook for providing a platform for his predecessor to “spread fear and misleading information”, though he has stopped short of recommending its breakup.

With tech companies enjoying more influence than ever before, it remains to be seen just how far the new administration will go to curb their power. The September and November tech selloffs have shown that the Big Five’s stock is not invincible; 2021 may see the end of tech giants as a sure bet for investment.

Though their market values have never been higher, and they have managed to keep up consistently high performance during the COVID-19 pandemic while other businesses have foundered, politicians from both sides of the aisle have managed to find an opponent in big tech.

Cannabis

Though not as high-profile an issue as climate change, the debate surrounding the regulation of cannabis played a role in the outcome of the presidential election and will likely have consequences for the markets. Biden’s campaign platform included the decriminalisation of cannabis at the federal level, which – while not the same as outright legalising the drug – would pave the way for long-awaited cannabis banking reform and greater acceptance of the substance’s recreational use over time.

Several other Democrat leaders, including New York governor Andrew Cuomo, have vocally supported the legalisation of cannabis, as have 66% of Americans, which bodes well for the future of the industry. Worldwide cannabis sales tripled to almost $11 billion from 2014 to 2018; Wall Street analysts predict that figure could land anywhere between $50 billion and $200 billion a year by 2030. In the shorter term, investors may want to keep a close eye on Canadian cannabis producers such as Organigram Holdings or Harvest Health & Recreation Inc – or Tilray, which managed to double its value in January alone.

More Broadly

One of the final sectors that is sure to see movement in the Biden era is healthcare. Looking past the headline-making pharmaceutical companies producing COVID-19 vaccines, and the fact that Biden has not embraced “Medicare for all” like many of his fellow Democrats, the health industry will undoubtedly be boosted in at least some areas by the new president’s policies. Biden has promised an option “like Medicare” for individual health plans, a boon for existing Medicare supplemental plan providers like UnitedHealth Group. As many as 23 million Americans could be made eligible for Medicare under Biden’s policies, which is sure to elevate healthcare fortunes.

And to move back from specific industries, there is reason for investors across the board to take note of the incoming administration’s policies. Biden has stated his intention to raise the corporate tax rate back to its pre-Trump level of 28% and to tax foreign income more aggressively, which obviously bodes poorly for the stock market. But before that can occur, a $1.9 trillion COVID-19 stimulus package is sitting on the table, sure to lift US markets broadly should it pass Congress.

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This stimulus package and the measures that may follow it, with a second spending plan slated to arrive “in the first few weeks” of Biden’s term, should give traders plenty to be optimistic about in the short term. Whether the specific industries listed above ultimately see their fortunes raised will depend on negotiations in government and the evolution of external factors like the ongoing pandemic, but prospective investors would do well to plan for the new president’s policy objectives in the years ahead.

BlackRock, the world’s largest asset manager, has been accused of “greenwashing” its investment activities in a report showing that it continues to hold as much as $85 billion worth of investments in coal companies.

The report, which was published by NGOs Reclaim Finance and Urgewald on Wednesday, revealed that the company’s climate policy contains a loophole allowing it to hold shares in companies that earn less than a quarter of their revenues from coal. As a result, it has retained shares or bonds in many notable coalminers and polluters.

BlackRock still holds investments in BHP, Glencore, RWE, Adani and other companies involved in the fossil fuel industry.

The findings come a year after BlackRock chairman and CEO Larry Fink wrote a letter to clients claiming that sustainability had become the firm’s “new standard for investing.” As part of its new climate policies, it abandoned all of its actively managed investments in companies making more than 25% of their revenues from coal and introduced a range of new ESG fund options for clients to invest in.

However, the campaigners who carried out the latest research are now calling for BlackRock to divest fully from coal, including from companies like Japan’s Sumitomo and Korea’s Kepco that are planning to expand coal production. BlackRock holds $24 billion in assets in such companies.

Lara Cuvelier, a sustainable investment campaigner at Reclaim Finance, said BlackRock should fully distance itself from coal as a “bare minimum” change as global temperatures rise.

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“One year on, it’s hard to see Larry Fink’s sustainability commitment as anything other than greenwashing,” Cuvelier said in a statement. “If he really wants BlackRock to be a climate leader instead of a climate pariah, he needs to start aligning green words with green deeds, and direct BlackRock’s awesome financial power towards a sustainable future.”

The UK’s financial watchdog issued a statement on Monday warning prospective investors about the risks of putting their money towards cryptoassets such as Bitcoin.

The Financial Conduct Authority (FCA) encouraged customers to understand the financial risks of cryptoassets and schemes involving them prior to investing, given that they were unlikely to be protected under the financial services compensation scheme or the financial ombudsman service, which help UK investors reclaim their money when a company collapses.

“The FCA is aware that some firms are offering investments in cryptoassets, or lending or investments linked to cryptoassets, that promise high returns,” the regulator said, noting also that some crypto investment firms may be overstating the potential payouts of cryptoassets or understating the risks involved.

“Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money,” the organisation continued. “If consumers invest in these types of product, they should be prepared to lose all their money.”

Bitcoin has experienced an unprecedented 300% rally since October 2020, reaching new milestones regularly in the final weeks of 2020 through to the new year. Last week, the cryptocurrency’s total value passed $1 trillion for the first time in history.

Analysts’ warnings of an overdue price correction came to fruition over the weekend as Bitcoin underwent its sharpest two-day fall in nine months, falling as much as 21% down to $32,389 before stabilising around the $35,650 mark on Monday (around 12% down from its $41,000 high).

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In addition to its warning for investors, the FCA issued a reminder to firms that new rules which came into force on Sunday now require crypto companies to register with the organisation and carry out money laundering checks.

US investment banks are set to delist Hong Kong-listed structured products linked to companies sanctioned under a recent executive order from President Donald Trump.

Goldman Sachs, Morgan Stanley and JPMorgan will delist a total of 500 Hong Kong-listed structured products, according to filings from the Hong Kong stock exchange on Sunday. These structured products are linked to telecom companies China Mobile, China Telecom and China Unicorn.

The executive order that prompted the delisting bans US citizens from investing in firms that the government has deemed to be linked with the Chinese military. 35 firms were targeted in the order as enabling “the development and modernisation” of China’s armed force and which “directly threaten” US security.

From 11 January at 09:30 EST, US investors will be prohibited from owning or trading securities in the banned companies. This extends to pension funds and share ownership.

Transactions made for the purpose of divesting ownership in the firms will be permitted until 11 November.

Bourse operator Hong Kong Exchanges and Clearing released a statement saying it was “working closely with the relevant issuers to ensure orderly delisting, and facilitate buyback arrangements being arranged by the issuers.”

The operator added: “We do not believe this will have a material adverse impact on Hong Kong’s structured products market, the largest in the world with over 12,000 listed products.”

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In a separate statement, US custodian bank State Street confirmed that an ETF it manages which tracks the Hang Seng Index would no longer make investments in sanctioned stocks, though it would maintain its existing shareholdings.

The statement also noted that, according to information published by the US Office of Foreign Assets Control last week, the fund was no longer appropriate for US firms or individuals to invest in.

The value of the combined cryptocurrency market has passed $1 trillion as Bitcoin and other virtual token prices have seen widespread surges.

Bitcoin hit a new record high of $37,732 at around 5.40 AM GMT, only days after passing the $34,000 mark. The total value of the Bitcoin currently in circulation is close to $700 billion, making up the bulk of the crypto market cap.

Bitcoin’s rise has also lifted smaller cryptocurrencies including Ethereum, cardano and Ripple’s XRP.

Given its status as an alternative asset, crypto’s rise has been attributed in part to investors fleeing traditional markets in the wake of major events. The outbreak of the COVID-19 pandemic and resulting lockdown measures caused a sharp rise in investor enthusiasm which has continued to last through to 2021.

Bitcoin in particular has been sensitive to the political climate. Its latest price rally, which saw the currency’s value rise by 7% over the last 24 hours, came after Democratic candidates won crucial runoff elections in Georgia, giving the party control of the US Senate in addition to the House and, come 20 January, the presidency.

Overall, Bitcoin’s value has risen by 200% since the start of October. The currency has begun to move shift towards the mainstream payments landscape as PayPal moved to let its customers trade using Bitcoin on its platform.

Naeem Aslam, chief market analyst at Avatrade, said the 6 January chaos on Capitol Hill helped to shore up the price of Bitcoin, and said that the currency was “surely and clearly heading towards the next important price level, which is $40,000.”

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“A real bull rally has only begun,” he predicted.

As I sit here contemplating the areas of my focus for 2021, I hear Boris Johnson in the background announcing yet another lockdown. My heart sinks as I think not of myself, but of those people on the frontline working and even dying to try and keep us safe. I also think of the countless number of people who are facing financial collapse and emotional upheaval again. It is not a great time for us all, but we are in this together and now is the time we must sit back and think of those around us, possibly helping where we can.

2020 was a year of chasing medical stocks, betting on who would be the first with a vaccine and tracing technologies. Are we looking at the same in 2021, or is that trend best left for others to fish out the last remnants?

I have personally seen some of the technologies that people have ploughed a great deal of money into, started to grow into mature areas of health and find new homes for their technology. We have also pulled a huge amount of data over the last year, which is gold in the eyes of many organisations. So, what do we do with all of this, and where is it going to go?

In the UK, we have had Brexit with a deal (although some may argue otherwise), COVID, but also a big shift caused by COVID, with what I consider will be the reboot of how we do things. The environment seems to have done rather well without us all driving, flying and burning carbon like it is going out of fashion and I think we would all look rather bad if we ignored that factor when the COVID clouds lift. The UK has been voted as one of the most invested countries in the world when it comes to technology and our scientists are proven world leaders.

With that in mind, I consider that the following areas are going to be very worthy of investment from big houses, backed up by a few smaller players, of course.

Cryptocurrencies

A word of warning, this is volatile! Over recent months, bigger fish are jumping into the crypto world and recently multiple large hedge funds have announced a rather large investment into some of the coins. This is very likely what has pushed Bitcoin up into the $30K area but, as you will notice with the lower volume trading, it can be affected dramatically during a sell-off. If you can buy and shut your eyes for a while, analysts are suggesting it will hit $100K. This certainly is not for the faint-hearted though!

Artificial Intelligence

I consider about 70% of AI to be nothing more than complex algorithms and the acronym is right up there in abuse land as VR (Virtual Reality). However, there are some diamonds out there and I am eyeing companies which are taking advantage of the huge and complex data collected during the COVID outbreak. There is an awful lot we can learn, not just from the actual virus, but from the execution, drugs and even prediction of the next mega virus or, as we learned recently, the mutated strains of COVID-19.

Blockchain / DLT

This is one of my keen areas of interest and not just because I am involved in a DLT project. Stepping away from cryptocurrencies, the concept of decentralisation intrigues me and there are a plethora of use cases of which this technology fits perfectly. Supply Chain, Traceability, Smart Contracts – you name it. However, be wise to watch and learn before jumping into a stock in this sector. Companies are throwing spaghetti at the wall to see which one sticks and producing the “next big” failure on a daily basis. This sector reminds me of the dotcom era in many, many ways. Loads of money to be lost on weak or impossible solutions, but somewhere there is that one or two “Googles”, which will emerge and change the world as we know it. One thing is for sure, we simply have to embrace the change and the increasing speed of the overlap between our physical world and the digital twin of our world which is coming very soon. Pick wise and there will be digital gold waiting for you at the end of the blockchain rainbow.

Digital Games

Yat Siu of Animoca and Outblaze seems to be the current Midas touch man which we should be watching very closely. His games are rocketing and he is a real blockchain evangelist. With (and I cannot believe I am saying this) digital real estate becoming a very distinct reality, it looks like we are going to be playing “Ready Player One” sooner rather than later and Yat seems to be a forerunner in this arena. With Animoca’s recent acquisition of Lympha and a digital deal struck with Manchester City, I can see exactly where he is heading and if executed correctly, he certainly is on a winner.

Medical Technologies

Away from pharmaceuticals, the COVID pandemic has created a rather large surge in technologies around medical devices. Just look at the uptake in thermometers and wearable devices. The smart players have made the long-term bet and developed/developing their technologies for a post-COVID world. For instance, hospitals need to get us out of their beds and back home to free up space on their wards. I am watching a wearable solution right now which does exactly this and provides a vast amount of data for doctors to monitor remotely. It feels kind of like the future will be computer systems monitoring us and diagnosing or predicting what’s wrong with us. But again, we will likely have no choice other than to embrace it and I would certainly prefer to recover at home!

And this brings me to my final trend prediction, which I think is the biggest no brainer here. 

Environmental Technology

Did you see the pictures taken during the lockdown? If you did, then I imagine, just like I did, you had a little ‘wow’ moment. Seeing the pollution lift all around the world certainly opened my eyes up as to the damage we really are doing, choking our planet because we just seem to not be able to see through the fog. The Duke and Duchess of Cambridge, William and Kate, are making big waves on the subject again and the incentive is out there for a big clean up. I believe that technology is going to play a huge role in the clean-up of our planet over the next decade or two and I am currently eyeing quite a few companies with very strong and clear-cut missions, along with the technology to do just this. Corporations ESG requirements are driving them to find and fund the technologies, so watch out for the ones which the big banks are eyeing too! 

Well, that is my predictions for the forthcoming year and I hope that when you hear from me next, we are all in a better place and out of the lockdown again. We have a long road ahead before we are clear of this virus, but thanks to the fast-paced advances in medical technology, we should outrun COVID-19 in 2021. 

*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.

Shane Neagle offers Finance Monthly a rundown of the opportunities investors should be exploring in 2021.

2020 has been a wild ride for investors. The coronavirus pandemic and subsequent lockdowns spooked many investors, causing a selling spree that peaked on 16 March . Dubbed “Black Monday III,” 16 March saw global markets decline 12-13%. Nervous investors can hardly be blamed for overreacting, however, when you consider that many across the country were stockpiling toilet paper and canned goods in preparation for the pandemic.

Thankfully, it wasn’t long before the market turned bullish again and stocks began skyrocketing back to their normal levels — or higher. Savvy investors who bought stocks, bonds and commodities during the dip yielded massive returns in almost every sector. 

Although we can’t replicate the amazing buying opportunity 2020 presented, we can look forward to other investments that will yield similar returns. Hopefully, 2021 will see the global economy head further into recovery and present unique buying opportunities of its own. 

In this article, we will discuss five of the best investment opportunities for 2021. 

Five Great Investment Opportunities in 2021

2020 was a unique year in that it brought investment opportunities outside the arena of traditional finance. Online trading became popularised and democratised through easy to use investment apps. For example, the aptly named Robinhood soared in popularity by enabling anyone to trade in the stock market — with a mere smartphone and bank account.

2020 was a unique year in that it brought investment opportunities outside the arena of traditional finance.

The rise of cryptocurrency, an enthusiastic topic among the tech-savvy and millennials, meant that financial opportunities presented themselves to those who might not normally have been interested in investing. 

Perhaps indicative of new market-disrupting trends and the waning power of conventional wisdom, many investment gurus were proven wrong about their predictions in 2020. For example, Warren Buffet, the “Oracle of Omaha,” advised investors to dump airline stocks in one of the worst pieces of advice given to investors this year.

There’s no point rehashing 2020, however. Every good investor knows that profit is made only by looking forward. So, without further ado, here are our top 5 investment opportunities for 2021. 

1. Retailers

Location-based retailers were hit hard by the pandemic, specifically those that hadn’t invested in an eCommerce platform. It’s easy to assume that most people will resume their online shopping habits even after the pandemic, especially when you consider the convenience of doing so. Business owners recognise this, which is why 74% of all organisations are actively involved in digitally transforming their businesses. That includes many brick-and-mortar retailers who are taking their stores online. 

However, there are many purchases that must be seen before being bought. The increased use of vanity sizing and misleading eCommerce photos mean that many consumers won’t purchase clothes without trying them on first. Products like perfume and cosmetics are difficult to choose online. Investing in Nordstrom, Macy’s and similar companies can yield sizable returns. 

Investing in stocks like Simon Property or other companies that hold retail spaces are another potential win. These investments are a little more stable when you consider that the companies actually own the real estate which the retail stores rent, which in the case of massive shutdowns of retail stores can be converted to another profitable use.

Investing in stocks like Simon Property or other companies that hold retail spaces are another potential win.

Home improvement retailers are also steadily on the incline, so buying early in 2021 is well-advised. As more people find themselves at home, interest in home renovations is at a record high. Stocks like Lowe’s or Home Depot are in this category. 

2. Clean energy stocks

As the US prepares to enter a Biden presidency, it’s a sure bet that clean energy will be a focus of his administration. Investing in clean energy stocks or at least keeping abreast of American government developments in eco-friendly policies is a must for 2021.

The movement towards clean energy is a long-term focus for many governments and organisations around the globe. Due to the longevity behind it — and the sector’s significant impact — clean energy is a great candidate for those who favour passive stock investing.

The electric car mandate that was passed in California, which required that all vehicles sold in 15 years be emission free, is a harbinger of more to come. The United Kingdom recently approved a £40 billion investment in green energy. Consider adding energy stocks that offer above average dividends to help your portfolio balance out long-term stocks that might take longer to recovery. 

3. Healthcare stocks (not involved in vaccine research)

A lot of investors looked to healthcare companies working on a vaccine during the pandemic for huge gains. However, many people neglected to consider the healthcare companies that were negatively affected by the pandemic and might yield large returns once a vaccine is rolled out. 

Nearly half of all Americans had medical care delayed due to the pandemic. Pharma and life science companies that are focused on cures and treatments for diseases were put on the back burner as many investors sought out companies like Moderna and Pfizer.

Many people neglected to consider the healthcare companies that were negatively affected by the pandemic and might yield large returns once a vaccine is rolled out. 

Companies that will benefit from an increase in elective surgeries are good investments for 2021. As hospitals have more room for patients other than those infected by COVID-19, there will be a need for different medical supplies and treatments for different ailments. Consider Intuitive Surgical, ARK Genomic Revolution or Danaher for your stock portfolio. 

4 - Bitcoin/cryptocurrency

This year, the Fed printed money at levels never seen before, which will lead to global inflation in the coming years. Investors who are interested in finding a way to store their money without losing its value would do well to look into cryptocurrency, which relies on cryptography to encrypt financial transactions. 

It’s largely for this reason that cryptocurrencies such as Bitcoin are an appealing investment option to so many people. In January of this year, Bitcoin was worth $7,000. As we end the year in December, Bitcoin is now worth a whopping $23,000 — a 228% increase in price.

Bitcoin shows no signs of slowing down in the future. According to Guggenheim’s Scott Minerd, Bitcoin should be worth closer to $400,000 due to its scarcity, the security of blockchain technology and its relative valuation. While you can never really know when it comes to emerging asset classes like cryptocurrencies, the fact that Bitcoin is getting institutional attention certainly says something. To take this a step further, whenever Bitcoin rises, it can act like a magnet — bringing other cryptocurrencies up with it.

5 - Travel Industry

Travel companies like airlines and hotels have no doubt been the hardest hit by the coronavirus pandemic. This presented excellent buying opportunities in 2020 which will continue into 2021. 

Investing in travel companies must be part of a long-term strategy, however. Many experts predict that it will take a few years before the travel industry fully recovers. This isn’t necessarily because people won’t want to continue travelling after being vaccinated. Many businesses that were hard hit by the pandemic will cut back on corporate travel, which is the leading driver of travel in most countries.

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Conclusion

As we head towards the end of an unpredictable year, it’s hard to think about what may still lay around the corner. However, as every good investor knows, it’s important to be ahead of the curve in order to recognise good deals and investment opportunities when they come. 2021 will see the continued recovery of the global economy and will present many great investment opportunities for those who stay focused and informed.

David Smith, a cryptographer from the Smart Card Institute, offers Finance Monthly a beginner's guide to various financial markets and what a prospective investor can hope to get out of them.

Most people get intimidated by the idea of making an investment – mostly because they don’t understand the different types of financial markets and which one could be the best suited for them. Our article today sheds light on the different types of financial markets so that you can make better investments in the future.

1. Stocks

Most people are aware of stocks. They are probably the most popular and simple kind of investment that has been around for a really long time. Basically, when you invest in stocks you are buying a part of a share in a public trading company. Some of the biggest companies in the world today such as Microsoft, Apple, Samsung, all sell their shares. However, they sell only a small percentage in the stock market.

Once you buy the stock and the prices go up in the stock market then you can sell the share at a profit. The downside is obviously if the price goes down and you will go into a loss. If you wish to buy stocks then brokers are the right people to get in touch with as they will help you make an investment.

2. Bonds

Buying a bond means you are lending money to an enterprise that is either government-owned or is a business. Businesses issue corporate bonds whereas the government issues treasury bonds or municipal bonds. Once you have held the bond for a particular time period and it reaches maturity, you can acquire the bond with interest. Bonds are generally a low-risk investment and come with a lower return as compared to stocks.

Buying a bond means you are lending money to an enterprise that is either government-owned or is a business.

3. Foreign Exchange

This is a relatively simpler investment. Foreign exchange investors buy a currency that is expected to increase in value in the future and then they make a profit out of it. The profits all depend on the exchange rates at the time of selling.

4. Mutual Funds

Mutual funds refer to a pool of investors who are investing in several companies at the same time. These funds are either managed actively, in which the manager chooses the companies for the investors to put their money, or they can be passively managed, in which the fund tracks some stock market investment. There can be mutual funds which are a mixture of actively managed and passively managed funds.

5. Certificates of Deposit

One of the safest forms of investment is a certificate of deposit in which you give money to a bank for a certain time period and once the time period is over you can withdraw the money along with the interest which was pre-determined.

6. Physical Assets

Investing in physical assets means you are buying an asset that holds a market value and can be liquidated when you need the money. These assets can be precious metals, jewelry, property, etc. As in the case of most investments, investors who put their money here expect the prices to increase so that they can sell their property, jewelry, etc. at a higher price.

7. Cryptocurrencies

Cryptocurrencies can be thought of as digital currencies that have market value and are a great investment option. Bitcoin is one of the most famous cryptocurrencies that is now coupled with advanced smart card technology. However, cryptos can be an extremely risky form of investment as their value fluctuates tremendously.

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8. Retirement Plans

Most people are offered a retirement plan at either their workplace or some other means. Retirement plans are not exactly an investment category but they can be thought of as a means to make other investments as they give you countless advantages such as tax leverages.

9. Annuities

A lot of people use annuities coupled with their retirement plans to make investments. Once you purchase an annuity you come to terms with a contract with an insurance company that provides you with payments periodically. The payment duration and the amounts are both predetermined. Annuities are a low-risk investment but they are low-growth as well.

10. Options

Options can be thought of as a complex kind of stock. An option gives you the ability to either buy or sell a certain asset at a predetermined price at whatever given time. An option may decrease in value and might end up in a loss for the investor.

Conclusion

Overall, financial markets make it possible for companies to acquire capital due to their regulated and open system and enable businesses to balance risk with the help of foreign exchange, commodities and other derivates.

Some of the investors who are earning billions from the stock market have suggested doubling your invested money every three years at a CAGR of 24%. Investing in stocks doesn't mean you can sit idle and earn higher returns. You can earn profit as well as lose it. But staying patient for the long run and diversifying your portfolio is a good option.

Speaking of diversifying, the RBI of India has permitted investors to invest an amount in US stocks. Most of the stocks are traded on an exchange such as NASDAQ. Some of the best NASDAQ stocks of the year include Workday WDAY, Nvidia NVDA, Zoom Video Communication ZM, Tesla shares, Jd.com JD, Marriott Int MAR, Apple AAPL, Expedia Group EXPE, and Ulta Beauty ULTA.

A stock market, also known as an equity market or share market, is an auction where several buyers and sellers join to carry out the purchase and selling of stocks. Purchasing a share of a company means you are given legal ownership for a part of the company.

Basic information on how the stock market works

• The purpose of investing in the stock market is to provide companies with capital to expand their business. In return for this, investors also get advantages. The investors get an opportunity to have a share of the profits earned by the companies.
• Stocks are not only traded on exchanges but also over the counter. Government agencies such as the Securities and Exchange Commission in the United States regulate the stock exchange, which is a marketplace for investors to buy and sell stocks. For the stocks being traded over the counter, they can be purchased or sold in the marketplace through either a dealer or a market maker.
• The most regular participants of the stock market are investment banks, stockbrokers, and investors.
• Stock market indices are designed to reflect the overall performance of the stock in the market. These performances decide the chances of making profit or loss from investments.
• Bull and bear markets - "Bull market" refers to the stock market when the prices of the stock are gradually rising. Most investors are tempted to invest in this type of market rather than short sellers of stocks. In the case of the bear market, the price of the stocks keeps declining. Through short-selling, investors have the chance to earn profit in bear markets.

Some of the investors who are earning billions from the stock market have suggested doubling your invested money every three years at a CAGR of 24%.

• Analysing the stock market - It is important to analyse the stock market by considering the price to earnings ratio, debt to equity ratio, return on equity ratio, and profit margin of the company you are about to invest in.
• Approaches to stock market investing - There are several methods for picking up a perfect stock to invest but the two basic approaches are value investing, or growth investing.

How can you become rich by investing in the stock market?

Here are some tips for you:

1. You must set your financial goals and decide your investment appetite based on your earnings and savings.
2. Make proper research about the company you are investing in. You can also keep track of the most listed companies so that investing becomes minimally risk-prone.
3. Stop regretting after you have already invested. You must keep in mind that investing at lower prices and selling the stocks at a higher price is almost impossible until you have inside information in the company. You have chances to make a profit as well as incur a loss.
4. If you want to earn more then always take liquid stocks as they provide chances to earn higher returns.
5. While investing in a stock market you must understand the market properly, stay patient for a longer period, and stay focused with your investment goals. Don't get affected by market fluctuations.
6. Make a monthly budget plan for investing in stocks. With a budget plan, you can cut off your extra expenses and increase your savings, which will help you to further increase the amount of investment.
7. Use index funds so that your portfolio gets the chance to broadly diversify. With a single stock, you cannot be rich, so start investing with a small amount in different funds of several companies.
8. Hold stocks for a long time. Buying and selling of stocks within a few months or a few years are not beneficial for investors, as they may not earn returns from the amount as expected.
9. Diversify your portfolio to reduce the number of risks and increase the return rate. Speaking of diversification, you can try investing in US stocks, as these are going to become more promising than ever before in the coming years. For example, the trading of Nvidia Corporation shares has increased by 26.57% in the current year. Investing in such shares is a smart choice. This will also add global diversification to your portfolio.

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1. Risk calculation is very important in an investment procedure. If you are not tolerant of risk then it is suggested that you don't invest in the stock market as these are highly risk-prone areas. Decision risk factors like market risk, business risk, inflation risk, regulatory risks etc, are all factors.
2. Don't borrow money from leveraged investors for investing in a stock. This will push you to the losing side right from the beginning, as in case of any market fluctuations you will have to bear huge pressure to pay back the borrowed amount of money and is, therefore, a risky practice.
3. Review your investment portfolio regularly.
4. Have proper knowledge of when you are going to invest more, when to sell the shares, or when to exit from the investment.
5. Don't make emotional decisions. Instead depend on facts, and data, to look into the company's performance, and how much the company is promising.
6. If you are a new investor then you must do a shadow or a diamond investment so that your knowledge is enhanced and you understand the market more accurately.
7. Beware of penny stocks. Don't invest in these stocks by seeing the minimum amount of investment as it may lead you to go bankrupt.

On a closing note

Investing in stocks means you want to increase your capital but there is nothing free in this world. Hence, to earn more you need to face the risk factors. Besides this, you need to have patience, skills, a focused mindset, clear financial goals, and a proper plan of investment. No one can say for certain that you will become rich by investing in the stock market but there are chances that your capital will keep growing if you are holding the stocks for a longer period.

Jamie Johnson, CEO of FJP Investment, offers his thoughts on the trends that will influence the UK real estate market in the year to come.

With the Pfizer/BioNTech vaccine starting to be administered to UK citizens, it’s safe to say that the end of COVID-19 could be in sight. After almost one full year of lockdowns, social distancing measures and job retention schemes; we may be soon returning to something resembling normality.

However, our transition to the “new normal” will be notably different to the pre-COVID-19 environment. Tax reforms and spending cuts are looking likely, as the UK government scrambles to make up the shortfall for what it spent combating COVID-19’s economic impact.

The UK has been long been heralded as one of the world’s leading investment destinations. There is good reason to believe this will remain the case, despite the obstacles on the horizon. A recent piece of research commissioned by FJP investment revealed that 42% of investors are confident the UK shall remain a global investment hub following COVID-19 and Brexit.

So, given all of this, which assets have investors been retreating to amongst all of this uncertainty? Based on what we have been witnessing at the moment, there is no denying that residential property remains high on the list for sophisticated investors.

Spotlight on property

Amidst all the market volatility and global uncertainty witnessed throughout 2020, British real estate has demonstrated strength, resilience, and perseverance.

In fact, market demand for property has been rising at an impressive rate. If we use house price growth as measure of buyer demand, this is evident. Halifax’s House Price Index for November revealed that house prices have risen annually by 7.6%.

Amidst all the market volatility and global uncertainty witnessed throughout 2020, British real estate has demonstrated strength, resilience, and perseverance.

Understandably, it looks as those some buyers are investing in UK property to hedge against any financial uncertainty. While other asset classes are suffering from high volatility as financial markets adjust to new COVID-19 developments, the price of UK property has consistently trended upwards throughout H2 2020.

This is a reflection of the positive sentiment investors hold towards bricks and mortar. FJP Investment’s aforementioned research also found that a majority (51%) firmly believe UK real estate will remain a sound investment regardless of how Brexit and COVID-19 play out. And, as the year comes to a close, I believe that this optimism will soon translate into record levels of transactions. Already transaction numbers are high, with October 2020 witnessing approximately 8.1% more transactions than October 2019. What’s more, with the Stamp Duty Land Tax (SDLT) holiday coming to an end on 31 March 2021, we are likely to see transactions numbers spike further.

The SDLT holiday, implemented in June and potentially saving house buyers up to £15,000, has been credited with successfully luring investment back into British real estate after the first summer lockdown earlier this year. Given the considerable savings this tax break allows for, I suspect that investors will flock to property in the new year before the holiday ends.

Constructing new builds to meet demand

With regards to infrastructure and potential new builds, it’s up to the government as to whether they wish to push forward with their plans from earlier this year for a "housebuilding revolution". The UK is still suffering from a mis-matched housing sector, with demand far outstripping supply, so fulfilling the promises made during the 2019 General Election to ‘level up’ the nation via pouring billions into new builds should be welcomed by investors and seasoned property experts alike.

Allocating such funds for infrastructure and housebuilding not only fulfils electoral pledges but is paramount for facilitating a wider post-COVID-19 economic recovery. For this reason and others, I’m confident that Prime Minister Boris Johnson will push forward with previous plans to help fund construction and development projects in 2021.

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Regarding other plans, such as extending the SDLT holiday or implementing negative interest rates, it is difficult to make assured predictions at the moment. However, for property investors and housing developers, I’m personally optimistic about what 2021 may hold. Given the incredibly strong performance of UK property throughout this year’s pandemic, I’m confident that this sector will remain a prime destination for investment and a source of impressive long-term gains for the foreseeable future.