Given the roller-coaster kind of a year that investors across most of the globe had in 2020, it is only natural that highly adventurous ideas have lost their appeal to many people. In this article, we analyze some investment trends in 2021 that are associated with increased risk and why such stocks should be avoided if prudence is your guiding principle in online CFD trading as well as other approaches to investment.
Cryptocurrency: Promising but Also Daunting
Surrounded by seemingly infinite controversy, the idea of cryptocurrency is still enticing to some potential investors. This is primarily due to the market’s high, ever-increasing volatility. It is also a growing field, with as many as a hundred million people owning crypto assets at present, partly in the wake of the Cyprus bank crisis that caused bank trust to plummet back in 2012/2013.
While some experts predict a market cap of 1 trillion USD for bitcoin in the year to come — and that would require a great surge in the currency’s price — the market remains open for new regulations and thus subject to rapid changes. This inevitably translates to higher-than-average-risk.
(Too Many) Stocks in Travel-Related Industries
Even though the COVID-19 pandemic is not likely to last forever, it has every chance of shaping the markets in 2021 as it has in 2020. The question here is how quickly the transition back to normality will happen. There is a wide-spread expectation, largely fueled by vaccination news, that the long pent-up desire for travel will finally be unleashed in the coming year, causing an uplift in travel.
Conservatively thinking, however, the prospect is no less uncertain than it is optimistic. The bounce in the travel and leisure sector is almost sure to happen but will likely take time until investors’ trust is restored at a large scale, which might happen to be beyond 2021.
Gold: No Rush!
The gold market showed excellent performance when the pandemic first struck the world. Investors generally switched to classical commodities traditionally associated with lower risk in times of need, causing the price to finally surge after a lengthy recession. Some experts maintain that it is not the pandemic and the economic uncertainty caused by it that brought about the ulift but rather the general monetary crisis, compounded to a certain degree by international tension.
Whichever estimate might be more accurate, it seems to be beyond reasonable doubt that the mini-rush for gold is over. The growth has already slowed down considerably, with not-so-promising prospects for 2021.
Work-from-Home Is Out of Fashion
Zoom’s stock did seem to be the most obvious choice for investors on the onset of COVID-19 back in 2019 to 2020. Now that vaccine roll-out is a highly realistic prospect, though, we should expect a certain amount of rebound in business in general and corporate communication in particular. It is also safe to say that most companies have already made their choice in terms of staying connected during the pandemic.
This said, companies offering work-from-home solutions are not likely to see as much of a boom as they have over the recent year. Please note that this by no means applies to products offering truly novel experience regardless of the demand for stay-at-home workforce.
Staying Safe in 2021
There are two distinct scenarios for the year to come as predicted by experts in investment, namely an extended recession or a quick rebound following vaccination, and an alarming amount of uncertainty in between. It thus seems viable to proceed with caution and moderation, avoiding highly volatile, risky markets.
