Nowadays, where to invest in the coronavirus crisis has become a particularly pressing question for most investors. The economy is going through hard times; many ways of earning money have now turned out to be ineffective. So how to get income from financial investments, taking into account the current situation?
Basics of stock trading
Now I would like to touch upon the topic of the financial market. This is a classic scheme of earning, implying the presence of both buyers and sellers of a specific product - various financial assets. The main goal of each party is to make a profit. Positions are purchased as cheaply as possible and sold at maximum value. The market participant puts the difference in his pocket.
Different trading instruments can act as an asset: securities, commodities, metals, currencies. The main difference between working with the market is the underestimated role of the financial instrument itself. It doesn't matter what exactly you trade. The main thing is the profit received, which is formed due to the difference in the purchase and sale prices of the asset.
The first official market for working with securities is considered stock exchange in Antwerp, which was organized back in the 16th century. At that time, freely convertible assets were traded on it - shares and bonds of various organizations. The latter were specific IOUs, similar to promissory notes. They could be produced not only by legal entities, but even by countries and cities.
Joint-stock companies existed even then. Their securities were freely traded on stock exchanges, including in Amsterdam. The list of such organizations included the East India Company. A little later, in the 18th century, the famous scientist Isaac Newton lost a considerable amount, having unsuccessfully invested in the shares of the South Seas Company.
The market began to develop actively at the end of the 19th century. However, not all countries supported current trends. Russia is a prime example. With the coming to power of the Soviets, all stock and commodity exchanges were closed as symbols of capitalism, which at that time were despised.
The main market participants are sellers and buyers. Individuals and legal entities can act as any of the parties. As a rule, large companies and investment funds trade on the exchange. Buyers get the opportunity to profitably invest their funds in assets, and then after a certain period sell them at the best price, making money on this. Sellers are given a chance to get a good investment, which will then be used to develop the business. Let me give you an illustrative example. Let's say you acquire APPLE shares... After waiting for the rate of these securities to reach their peak, sell them at a high cost. The difference will be your profit. The company also remained in the black, because it will spend the money spent on the internal needs of the organization.
The financial market infrastructure is formed from currency, stock and trade exchanges. These are the places where members buy and sell various assets. It goes without saying that such a complex and large-scale project should always be monitored. The exchange itself is directly involved in the regulation of the entire process. It helps to form free competition, monitors the absence of market monopolization, ensures a high concentration of constant demand for certain assets, as well as supply for buyers.
Not all participants can trade directly here due to the high cost of entering the market. Therefore, most individuals use the services of brokers. These are financial intermediaries between the exchange and its participants who bring smaller transactions to the common market for their subsequent execution.
It is not so easy to imagine the trading process for the average person. You probably imagine the stock exchange in the form of the image used in the movies: a crowd of people scurrying about, who are constantly shouting something into the phone and watching the scrolling lines on the scoreboard. The entire process is now fully digitalized. Assets are traded only electronically. For this, a special program has been developed, where the user sees the full range of available tools and their cost. If you are thinking about where to invest in the 2021 crisis, I recommend paying attention to the forex robot. Abi, in which you can very quickly place an order, as well as track the results of the trade.
Varieties of financial markets
The classification is formed by traded assets. To date, experts distinguish the following types:
- Currency market.
In this case, you can already understand by the name what exactly is being bought and sold on such an exchange. Various world currencies act as a trading asset. By the way, when buying or renting foreign money in the exchanger, you also participate in operations that are carried out on the local foreign exchange market.
- Forex trading.
Here we are already talking about a more impressive scale. Forex is the global foreign exchange market that all investors have access to. The daily trade volumes are truly impressive. Their result later becomes the basis for setting rates in bank exchange offices.
- Precious Metals Market.
Basically, it trades in gold, silver, palladium and platinum. In addition to these assets, futures and options can also be traded here. Each piece of paper is evidence that a certain amount of precious metal belongs to the buyer. Earnings come from the difference in the purchase and sale prices. To buy derivatives, you need to use the services of an exchange.
- Bond market.
In this case, the IOU is the trading asset. That is, the document will say that you have lent a certain amount to some borrower, and that borrower undertakes to return it within the prescribed period with the interest due under the contract.
Bonds can be commercial or government bonds. In the first case, the document is issued by a financial institution. In the second - by any country. It is government bonds that are considered the most reliable, as they are provided by a stable and large issuer with a large amount of property, which is a guarantee of the fulfillment of obligations.
If you want to know where to invest in the coronavirus crisis, listen to the opinion of economic experts. Most of them recommend not taking risks, but choosing only stable assets, for example, government bonds of reliable and financially stable countries. After all, with commercial papers, everything is somewhat more complicated. When a legal entity declares a default (a public statement about the impossibility of repaying a debt), then there is no guarantee that its property will be enough to compensate for the amount specified in the bond.
- The stock market.
Here, securities of various companies act as an asset. On a local exchange, bonds and shares of local corporations are circulating. Securities and foreign legal entities are involved in global trading. Exchanges of global importance include London, New York and a number of others.
- Cryptocurrency market.
This is where digital assets are bought and sold. Such coins are kept by their owners on special virtual wallets. To date, quite a few cryptocurrency exchanges have already been opened, most of which operate on a worldwide scale.
Access to global financial markets
Anyone can trade assets if they wish. For example, if you do not know where to invest in the 2021 crisis, you can start buying and selling foreign currency on Forex. As practice shows, this is a very promising investment option today.
To simplify the task for market participants, and especially for beginners, special projects were created that are engaged in the automatic trading of assets on the exchange, for example, a robot Abi... You can go to the official website of the company via the link, go through a quick registration and start trading currency. The Internet resource is completely Russified, no problems will arise. Even if you have only $ 250 in your hands, this is already enough to become an investor and start making money on the currency exchange.
On the international markets, you can buy precious metals in ingots, as well as contracts with their participation and derivatives. These instruments are confirmation that the holder owns a certain amount of a metal asset. In fact, you will not receive an ingot in your hands. However, when you close the contract at a good price, you can cash in on the difference in its value. Rumor has it that the real gold reserves are several tens, or even hundreds of times less than the turnover of paper precious metal. Even on a foreign exchange, if you wish, you can buy securities and bonds of foreign companies.
If you do not want to independently manage your finances using the automatic assistant Abi, then you can also make money in a crisis by transferring capital to trust management of some banks. In this case, professional employees of the credit institution will trade in assets. However, trust management will require a lot of money due to the high minimum entry thresholds. For example, just one share of Amazon will cost an investor $ 2.
The stock market is an excellent prospect for earnings and financial growth. However, novice traders can face many obstacles. I would say that it is better to trade here for those who already have practical experience in investments and have managed to accumulate a good portfolio.
Why many people think that trading is not for everyone
Despite the low deposit rates, most people choose to trust their funds to banks. Unfortunately, the financial literacy of the population today leaves much to be desired. However, in the case of Russia, there are also peculiarities of the development of the domestic economy.
In the USSR, citizens were actively encouraged to keep their money only in a savings bank. Although at that time the American stock market was already sufficiently developed to offer its participants a large number of trading instruments. If an investor has invested at least 50% of his salary in it for 10 years, then by retirement he has earned substantial capital. In our country, unfortunately, this was not the case. The money was kept on the savings bank at a symbolic 2% per annum. And in the 90s, as you know, they depreciated.
Many people simply do not know where to invest their money in the 2021 crisis, so they turn to banks, since they have not heard of other more profitable ways of investing. Most of the depositors also prefer credit institutions, as their deposits are insured by law.
How to secure your investment for a beginner
Remember the main rule: you cannot enter the market on a rush. Operate only with the amount that you are ready to lose as painlessly as possible for the family budget. In this case, the loss will not turn into a financial disaster.
Experts recommend investing about 10% of your salary, but be sure to distribute them across several assets. Leave one part on the deposit, for the second, buy shares of different companies, for the third, buy the precious metal. You can leave a little in cash at home. This will allow you to secure a large share of your funds. If some part of the investment gives a minus, then the profit on the rest of the positions will cover the entire drawdown. For example, the stock market collapsed, but gold simultaneously renewed another high in price.
If we mean stocks, then in this case the safest strategy is long-term investments. That is, you buy shares and for some time “forget about them, and after 20-30 years you understand that you have not only saved your money, but also multiplied it several times. This is how the layer of American large investors was formed.
But fast speculation often leads to losses. It is optimal to use it on Forex, since currency rates are updated every second. Here there is a chance to make money on short-term trading.