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European stocks opened lower on Thursday following an overnight sell-off on Wall Street that weakened equity markets globally.

The Dow Jones closed down 2% on Wednesday, the index’s biggest single-day fall since October. The slump came shortly after a pessimistic assessment of the US economy from the US Federal Reserve, and amid a market war between activist retail investors and hedge funds in parts of the market. The S&P 500 also lost 2.5%.

Asian stocks slid shortly after the Wall Street sell-off, with Japan’s Nikkei falling 1.5% -- its own steepest drop since October – and South Korea’s Kospi fell 1.7%. Chinese blue-chip stocks also lost 2.7%.

Losses were mirrored in European stocks when markets reopened, with the FTSE 100, CAC 40 and DAX sliding 1.5%, 1% and 1.7% respectively.

Though impactful, the Federal Reserve’s pronouncements on Wednesday were overshadowed by activity around so-called “Reddit Stocks” – equities being boosted by a wave of investors aiming to lift stocks that hedge funds are attempting to short, causing immense losses on Wall Street.

The focal point of the war is GameStop, a high street video game retailer that was targeted by short-sellers and then saw a flurry of trading activity as investors flocked to it. The company’s shares jumped 134% on Wednesday alone and are currently valued at $347, having been down as low as $17 earlier in the year. Cinema chain AMC has also been boosted by the movement’s attentions, gaining 300%.

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“The whole business is seen as a trump for the little traders, the Robinhood account holders who use Reddit to get their financial information,” said David Morrison, market analyst at Trade Nation. “On the other side is the Wall Street players who would happily see GameStop go out of business and people lose their jobs if it brought from a profit.

“Of course, life is never that simple, and the GameStop story is far from over as traders hunt out other heavily-shorted stocks. But it’s a salutary tale of our times and a timely reminder of the dangers that can lurk when shorting individual stocks."

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.

Stock trading is not an easy task. That is why it offers the potential for great rewards. Many people get the impression from social media that it is easy to make a huge amount of money from stock trading. However, the reality is that stock trading can be quite difficult at times, and even the best traders can suffer substantial losses.

The stock market is always in a volatile state, and it can get affected by minor or major events. The COVID-19 pandemic collapsed in the stock market, and it is still recovering from the effects. But intelligent traders can make substantial profits from the recovering market using some key ideas. We will discuss six of those ideas that can be a part of your stock trading strategy.

Use Stock Trading Software

When it comes to stock trading, you shouldn't rely on predictions and forecasts. Wall Street professionals love to tell their customers that they can predict the future of stocks better. But the market situation of 2020 is one of the best examples of the futility of stock predictions.

Stock forecasts can be useful in preparing you for market volatility as long as you react on time. Whenever you see a downtrend emerging, it is best to move to the sidelines. But it is best if you rely on technical analysis software rather than a person trying to make a profit from it.

Stock trading software provides the necessary research and analysis of the stock market. That allows you to investigate the stocks that interest you. You can get information on the past performance of the company with accurate predictions of the future. The stock software also provides real-time updates on stocks and recommends the ones that are best for investment.

You will have access to indicators that study past patterns and provide accurate predictions and forecasts. Some of the best software offers advanced tools like charts and customised tax reports. They allow you to develop your stock trading strategy with risk management steps to avoid market crashes like the one in 2020.

When it comes to stock trading, you shouldn't rely on predictions and forecasts.

Keep Your Accounts Close to the Highs

You will have to double your efforts to make up for the losses incurred in 2020. Most people believe that long-term investments are the best way to compound your money. However, you can also compound your profits by keeping your accounts high and gaining continuous results.

Instead of holding onto a single stock and hoping to get rich from it, engage in aggressive trading. It will allow you to consider the best stock options and benefit from compounding your profits by keeping your accounts closer to the highs. 

Compounding profits in stocks can fail if you suffer huge losses, which applies to long-term and short-term trading. That is why you must protect your gains in 2021.

Profits Are Sporadic

The stock market always goes through ups and downs of various patterns. Therefore your style of trading should always be varied and focused on the bigger picture. In the post-COVID-19 market, you still have to follow the 80/20 rule. That means you will make substantial profits 20% of the time you spend on stock trading.

If you had an immediate success, you have to keep in mind that you might make little progress 80% of the time due to the shifts in the market. Bear in mind that you might not be able to predict the period of peak profit. So you have to be always ready to spring into action whenever the conditions are favourable and make maximum profit from it.

Use Charts

Some people think that they can rely on their ability to predict macroeconomic events. Such people have suffered huge losses during the COVID-19 market crash. Charts can provide you a framework for your stock trading in a million different ways.

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They are not a way to predict the future performance of the stock market. But charts are extremely helpful to manage and monitor your existing trades. They can also help you anticipate when to buy or to sell your stocks.

Develop Your Own Approach

The best approach for stock trading is subjective to every person. Some people are efficient at following trends and developing momentum, while others work best with the fundamentals.

Therefore, you should formulate your own approach in 2021, depending on your methodology to view the market and buy new stocks. The stock market is always evolving, which means you have to keep modifying your methods to protect your capital and future investments.

Consider Incremental Trading

Most people feel that stock trading is a process of buying a good stock and then hoping to make a profit from it. The style of trading without a strategy resulted in huge losses in the 2020 market crash. In the new year, you should consider trading incrementally by taking an initial position and watching the action.

If you were wrong about the stock or market shifts, you would be able to sell the stock with the least amount of losses. On the other hand, if the stock is doing well, you can become aggressive and build your trade.

Stock trading is difficult, and that is why it has the potential for huge profits. Therefore you must have the right strategies to maximize your earnings from your investments. We believe that the methods we discussed above will prove helpful for your stock trading strategy in 2021.

Many tools and apps have been designed to assist stock traders in day-to-day trading. These apps can help you analyse your potential stock investments while minimising the risks. A trader needs a good trading platform based on the market they prefer to trade in. But other than that, we believe that every trader needs these five apps to capitalise on opportunities with minimum risk. 

Portfolio Tracker Apps

A portfolio tracker is an essential part of preparing yourself for stock trading. It is especially useful for traders who hold a position overnight or invest money in long-term trades. You can use it to track a stock portfolio before and after you invest in it. A stock portfolio tracker can help you make smart investment decisions.

You can also use it to manage your budget and keep a record of all your investments. Sometimes traders tend to hold onto losing positions, hoping that they would be able to earn their money back.

A portfolio tracker will remind you to stay away from bad investments. You can also use it to identify the trades and investments that are right for you. These are some of the features that you must look for when choosing a stock portfolio tracker:

Stock Charts Apps

You might need a stock chart to plan your future trades. It will provide you a graphical representation of the stock data along with the price and volume. A simple stock chart will display the price data as a line graph, which will keep changing with time.

A trader needs a good trading platform based on the market they prefer to trade in.

Some stock charts also display candlestick charts as indicators for trading volumes. Many complex stock chart apps allow you to set any added indicators that you need to analyse your trading activity. There are many free stock chart apps available, but they come with certain limitations.

You can expect a 15-minute delay on the chart updates, which may not be apt for day trading. Some free charts also have limits on the volume reports and would only display limited information on exchanges. On the other hand, paid apps will provide real-time price and volume updates and several other charting options. 

Financial News Apps

With stock trading and investments, news updates and your reaction time can make a huge difference to your profits or losses. Therefore, you must have financial news apps on your smartphone. They give you access to actionable business information, financial news, and stock market data.

You can switch on notifications for breaking news alerts to take real-time action. Some apps also give you access to interactive charts, real-time stock quotes, and global business news.

Practice Trading Apps

Practice trading apps are investment simulators that help you prepare for stock trading without any risks before you invest in real trades. It gives you the experience of trading in the stock market so that you can get a hang of it. You will be able to invest virtual dollars in the trading simulator and see whether your choice of stock would have been profitable or not.

It allows you to test your stock analysis skills and come up with learning goals. You can also use practice trading to formulate multiple investment strategies for the future. It is a useful tool to learn the intricate working patterns of stock markets and practice the theories.

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Automated Trading Apps

Automated trading apps are the perfect solution for you if you want to take the psychological elements like emotions out of the trading. You can use these apps to set your parameters to choose potential stocks, allocate investments, and open or close positions. But using an automated trading app does not mean that there are no risks involved.

You would still have to set the initial guidelines along with the entry and exit positions. The app will use its algorithms to monitor the stock market according to the conditions you have set. There are many advantages and disadvantages of using automated trading apps, so consider them carefully before you choose to use one.

So which are the right apps that can give you an edge to earn maximum profits and minimize losses? It is probably one of the most debatable topics because every trader has their own choice of apps and tools. There is no doubt that certain apps are better than others, so read reviews and get referrals before you select the apps for your trading arsenal.

Most major stock markets were lifted on Thursday amid reports that President-elect Joe Biden will announce a $2 trillion COVID-19 stimulus programme later in the day.

European markets saw modest gains, with the FTSE 100 opening 0.1% higher in London and the DAX gaining 0.2% in Frankfurt. Paris’s CAC 40 remained flat. The effect on Asian markets was more pronounced as Japan’s Nikkei hit a three-decade peak and Hong Kong’s Hang Seng rose 0.95%.

The bond markets also saw movement. The yield on US Treasuries, the benchmark for global borrowing costs, also rose two basis points to 1.11% on the expectation that a $2 trillion aid package will raise US debt levels to new heights. Meanwhile, European yields were held in place due to widespread COVID-19 lockdowns and heightened expectations of further bond buying by the European Central Bank.

US futures were largely subdued, with the S&P and Dow Jones respectively gaining 0.2% and 0.3% while the Nasdaq slid 0.1% down.

President-elect Biden is expected to lay out stimulus plans today in Wilmington, Delaware. According to CNN, Biden’s advisors have told allies that the total package could come to around $2 trillion.

"Essentially, the markets have been in a holding pattern for the past three days as dealers have been waiting to hear from Mr Biden,” CMC Markets’ David Madden told Business Insider. "To an extent, a large amount of positive news has been factored into stocks and commodities."

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A Deutsche Bank analysts’ note spoke optimistically on the possibility of fresh stimulus checks sent to US citizens, noting that Biden has been a vocal proponent of $2,000 checks in the past. The bank also noted the possibility of “additional immediate economic relief for families and small businesses”.

Investors have remained largely unshaken by Wednesday’s historic House vote to impeach Donald Trump, making him the only US president to be impeached twice.

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.

European and US markets are bracing on Wednesday as several countries impose stricter lockdown measures to curtail a spike in COVID-19 cases and the first of two key Georgia Senate races is won by the Democratic Party.

London’s FTSE 100 gained 0.8% at the open, while France’s CAC 40 gained 0.7% and Germany’s DAX gained 0.4%.

Following a brief relaxation of COVID-19 restrictions during the holidays, the UK and European nations are beginning to impose tougher measures. A third nationwide lockdown has been declared in the UK, along with new economic stimulus for businesses in affected sectors, with France and Germany now in their second lockdowns as a highly infectious new strain of COVID-19 spreads internationally.

Markets are also focused on the outcome of the two runoff US Senate votes in Georgia, which will determine whether the Democratic or Republican parties gain a majority. A Democrat win would greatly empower the incoming Biden administration, affecting the reach of the new president’s policies during his first two years in office and impacting the size of the next COVID-19 stimulus bill.

US networks and the Associated Press have called the first of the Georgia races for Democratic candidate Raphael Warnock, likely unseating Republican Kelly Loeffler. Democratic challenger Jon Ossoff also holds a lead over Republican David Perdue with 98% of votes counted, according to the AP.

“Our US economists have indicated that a Democratic Senate would likely lead to another large fiscal stimulus package, possibly including some priorities of the new Administration such as infrastructure,” said Deutsche Bank analysts in a note. “They see that as a material upside to their GDP forecast, which they currently see rising 4.3% Q4/Q4 in 2021.”

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Nasdaq futures were down 1.7% on Wednesday morning, while the S&P fell 0.2% and the Dow Jones gained 0.4%.

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.

Elon Musk’s Tesla on Monday will become the most highly valued company ever admitted to the S&P 500, with a market cap that will account for over 1% of the entire index.

Its 21 December listing is predicted to trigger a rush of stock trading on Friday as index-trading funds acquire shares so their portfolios will correctly reflect the S&P 500. $80 billion of the company’s stock is expected to change hands by the end of Friday’s session.

In addition to acquiring Tesla shares, funds mapping onto the index will simultaneously be forced to sell shares in other S&P 500 constituents worth the same amount.

Actively managed funds that use the S&P 500 as a benchmark for their performance, many of which have thus far shied away from investing in Tesla for fear that it has become , will have to decide whether they will risk buying its stock.

Shares in Tesla have risen by almost 700% in the past year, ranking it as the sixth most valuable publicly listed US company with a stock market value of over $600 billion. Stocks hit all-time highs on Thursday at $655.90 per share.

Tesla’s unprecedented stock surge in 2020 has pushed founder and CEO Elon Musk’s total net worth to more than $150 billion, cementing him as the world’s second-richest person ahead of former Microsoft CEO Bill Gates. Despite its current market value, Tesla has only turned a profit for five consecutive quarters, and recently completed a $5 billion equity sale to capitalise on its explosive growth.

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A study by Invezz found that Tesla shares were the most popular stock to invest in for Europeans in 2020. The company was the most commonly searched-for stock in 26 of 31 European countries analysed.

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

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%.

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.

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