This year has been very hard for many markets around the world. Because of the Covid-19 pandemic, most of the industries around the world have struggled a lot, because of which, people are finding it very hard to invest in any of the industries.
However, according to some studies, there is nothing to be panicking about. As the experts of the field are saying, it is very important for people to see that panicking is actually making everything worse. The thing is, although many fields lost a lot of money, there also were some that gained a lot. For example, markets like delivery services, have profited a lot during the pandemic.
Also, since most of the stocks were closed, traders around the world decided to invest in the Forex trading market. Although this is a very risky business, these people did not have any other option at some point.
Forex is known to be one of the biggest markets around the world, in 2019, the daily average turnover was as much as $5.1 trillion, which is a huge number. The challenge, however, was to find a trustworthy and reliable company.
Identifying a risky company
Sometimes, the risk of an investment is directly related to the company that the trader chooses to deal with. This can be for any asset including stocks, currencies, commodities etc. The real challenge here is to identify which company is legitimate and which one is untrustworthy.
Usually, what people do is they go on a witch hunt themselves just to end up with very little results as there’s no real resources to be absolutely sure. Furthermore, many people who had been scammed before tend to be a bit overzealous with their final “decision” on who is a scammer and who isn’t. Because of this, many relatively newer companies get branded as untrustworthy.
Due to such issues, the industry had to start relying on media outlets to somehow clarify most of the questions circulating about new brands. These outlets would interview the company owners, get exclusive access to their features and generally get a more objective view of a specific brand.
Usually the main point of these media outlets is to either prove or disprove whether a company is fraudulent. For example, a relatively large media outlet recently had such an overview of a mid-range brokerage called Axiory. Reading the review it’s quite obvious that the main point of it was to answer the question, is Axiory a scam or is it a legitimate company?
Thankfully the answer was that its legitimate. This was mostly based on regulation, operations overview and face-to-face communication between the company and the outlet.
It is indeed recommended that beginners sometimes try and read reviews of a company before doing their own and maybe compare how correctly the information matches on each of these platforms.
Why forex particularly?
The forex market was very successful during the pandemic, and this happened for a reason. More than ever before, forex trading is available in different parts of the world for a very diverse demographic, and thanks to technological advances, investing in Forex is very easy.
The world of investment is changing every day. There are many things that affect it, global crisis, wars, pandemics, etc. If you want to learn more about the abilities that people have in this market, you can learn more here on this page today.
What are the safest investments of 2020?
The safest thing to do is to use savings accounts. Although it is not technically an investment, they can still offer some return, especially in the long run. In most of the cases, a savings account Is completely safe because you will not be losing any money. Also, these accounts mostly are government-insured, which means that you might even be eligible for compensation if something goes wrong.
Like saving accounts, US saving bonds are not investments technically either, but they are more of a savings instrument. The greatest thing about these savings is that they can be very long term, and although the benefits are not available right away, they are considered to be a lot safer.
Preferred stocks are also a great way to invest. They are some type of hybrid of stocks and bonds, preferred stocks in many cases offer higher dividend payments than companies’ bonds, because in this case, payment is not completely guaranteed.
According to some researchers, since 1900, preferred stocks have managed to offer average annual returns of more than 7 percent.
Just like preferred stock, utility stocks are also known to remain relatively stable when it comes to price. It also pays dividends of about 2-3% higher than treasury securities, these can also be purchased with the help of online brokers, and although the prices are not as stable as it would be for preferred offerings, these are still very safe.
Also, if you are looking for safer ways to invest, you could use Certificates of Deposit, which are issued by Banks. Better known as CDs, they guarantee investors a specific interest rate over a specific term, for example, six months, a year, etc. However, you should not withdraw the money until the end of the term, because there might be some penalties applied. They are very low risk, and are a great way to get the money if you know exactly when you might need it.
Why would anyone choose low-risk investments?
Because of the financial instability, many people are getting afraid to invest in something that contains risks. However, it is very unrealistic to expect huge returns from low-risk investments, taking some risks might be a good idea for investors who want to make it big. On the other hand, if you are not looking for huge returns and are ready to wait for a very long period of time, low-risk investments might be a perfect thing for you.