How to Diversify Your Portfolio in 2021
Last year was a wild ride for everyone, including investors and traders. The onset of COVID-19 and subsequent lockdowns led the global market to decline by 13%. But the market picked up quickly, and almost all investment vehicles began skyrocketing. Intelligent investors who bought indices, forex, stocks, cryptos, and commodities during the bear market observed high returns in almost all sectors.
While the opportunities brought by 2020 cannot be replicated, making investments in 2021 can be looked forward to by investing in assets that are expected to bring high yielding results. In this blog, we discuss some of the best investment opportunities for this year:
Cryptocurrencies: The $1400 stimulus check Americans waited for came at a cost. The Feds are printing money at a rate never seen before, which will eventually cause global inflation in the coming years. In tumultuous times like these, investors find a safe haven that can work as a possible hedge against inflation. For the past six months, cryptocurrencies have been on the rise. The trend is more likely to continue in the coming years. With Bitcoin constantly reaching new all-time highs, investing in cryptocurrencies is an attractive option for even the layman.
Stocks: The stock market in the last year has been turbulent, plunging suddenly and recovering just as quickly. In mid-March 2021, the S&P index record-breakingly fell by 20% in just 16 days; - the quickest descent since 1933. After a while, the index rose around 63% to a new all- time high. Though stocks are considered volatile investments, they have high yield potential, especially through tech stocks. We can expect to see more investors entering this trend.
Forex: The daily trading volume of forex is roughly $6.6 trillion, making it the largest financial market in the world. This foreign exchange market involves hedge funds, large multinational trade companies, financial institutions, and more. As traders buy currencies, they create a reasonable flow of funds, thereby facilitating exchanging currencies globally. The FX market allows investors to benefit from the exchange rate movements and low transaction costs. Since economic conditions for the last four months have been positive, the coming days are looking even more promising for online forex trading.
Index Funds: Indices aim to track the performance of a market index. Professional investors consider index funds one of the best investment vehicles because they contain low risks and low costs. Unlike forex or stock markets, Indices don't give bull returns and tend to grow over time. They also allow traders to diversify their portfolio by spreading risk around different industries and asset classes. While most large stocks rallied in 2020, many small caps are poised to beat the market in 2021.
Commodities: Commodities are a preferred investment option among traders as it not only diversifies the portfolio but also behaves as a lucrative avenue to earn strong returns. Four major sectors come under commodities, including agriculture, metals, energy, and livestock. If users can understand the available commodities, smart investment decisions that can fetch good returns over time can be made.
Trade All Digital Assets on One Platform - DIFX
As the trading world moves at a rapid pace in 2021, more advanced platforms are essential to owning a diversified portfolio and keeping track of investments. DIFX will serve as a leading one-stop-solution for all asset classes. Though all the above investment vehicles are different, they can be traded on DIFX, in a single click, instead of keeping separate accounts for each asset class.
Users will be able to trade between indices, forex, commodities, stocks, and cryptocurrencies on the DIFX exchange without shuffling between different tabs. This streamlined process will revolutionize how trading is executed today and allow investors to have a seamless trading experience in both crypto and traditional financial markets.
This article does not necessarily reflect the opinons of the editors or the managment of EconoTimes