Top 5 Trading Ideas for 2020
In 2019, traders and investors experienced one of the most exciting years in the financial market. Trade frictions between the US and China, continuing Brexit-related problems, and a significant change in global central banks’ policy were just some events that took center stage last year.
Alongside a global coronavirus threat, these events make 2020 a very interesting year for Forex trading. The situation is not perfect, but there are always many possibilities for earning some additional dollars. Today, we will look at some of the best trading ideas for 2020, covering a wide range of different asset classes. Enjoy our top-5 trading ideas for 2020 below.
Idea №1: Gold Rush
Do you know that since 2010 central banks have evolved from sellers to buyers of gold? In fact, the World Gold Council data showed that in the first quarter of 2018, the demand for gold increased by 42%. In 2019, it created a gold rush and contributed to the increase of precious metal prices by more than 18%. Can the gold rush continue in 2020?
There are many fundamental reasons suggesting that the price of gold will continue to rise in 2020. These reasons include:
- the US-China trade tensions,
- the US presidential election campaign,
- the coronavirus threat,
- continuing concern about the stability of economic growth at a time when central banks do not seem to have weapons in their arsenal to support global growth.
Market positioning also shows a more positive picture of gold in 2020. Of course, the fundamental landscape may change throughout the year, but now we believe that it is worth your attention.
According to several studies, gold’s worth had a significant increase between 2000 and 2010. During the next five years, its worth started to decline. As of 2015, the worth again consolidated and started to climb up. Last year, the situation was pretty stable, so we entered 2020 with unchanged hopes when it comes to the gold’s worth. However, there are several crises that humanity encountered this year, we already talked about them, and it is uncertain what will the future look like. Anyhow, gold will always be gold.
Idea №2: Hong Kong Exchange Market
Did you know that in 2020, the Hang Seng 50 stock index started about 15% below its highest level in the history of HKD 33,510? For many investors, this is a very interesting offer, especially if the Hong Kong Stock Market called “Gateway to Asia” will manage to return to its highest values.
Although the threat of protests remains, there have been some positive changes. It includes Alibaba’s decision to place its shares on the Hong Kong Stock Exchange, which helped raise the company’s capital for $11 billion. This financial instrument should be added to the list of those that should be closely monitored in 2020.
Idea №3: The US Elections and Dollar
To help determine the direction of the US dollar, it is important to keep track of any triggers in the American stocks. However, the political situation due to the US presidential election in November may cause an escalation of tension between the US and Iran. But, “Super Tuesday” in the USA made Joe Biden a favorite of the race, removing the risks of the president’s “with left views” coming to power. The victory was so certain that billionaire Michael Bloomberg, who set the goal of fighting Bernie Sanders, withdrew his candidacy. Traditionally, political uncertainty causes the dollar to fluctuate.
While the world is trying to fight the coronavirus, some traders are opening short positions in the dollar index, while others trade dollars against other currencies. For example, long positions in currency pairs such as EUR / USD and GBP / USD may be beneficial. You can use these trading platforms to be informed or start your trading. However, there is a problem of the US dollar being closely tied to the price of oil. As you know, this recent crisis endangered oil export throughout the world. Yet, we believe that this is something that will be resolved after this global crisis with coronavirus passes.
Idea №4: Real Estate
Although 2019 showed stagnation in the real estate market, investments in this segment are still relevant. If you choose the right investment scenario, you can get a good profit. For example, buying a property for lease can bring about the same income as a bank deposit — up to 6% -8% per annum. You can earn even more on the resale of the secondary housing. This option will bring up to 20% -30% of the profit.
Idea №5: Cryptocurrency
The main plus of investments in cryptocurrency is the opportunity to get huge profits in the future. That broker, who invested in Bitcoin is fabulously rich now. Besides, many interesting altcoins are showing good growth. As an owner of cryptocurrencies, you are completely anonymous. We believe that the whole success of digital currencies is tied with this fact since you are not giving your personal information to anyone as you do in a bank. Moreover, you can be located in any place on the planet earth and still do transactions, which will be performed in a matter of seconds. This is another big plus for digital currencies. There are no boring administrative delays and no middleman between you and the person you would like to send to or receive money from.
Cryptocurrency is quite an interesting tool. It is not tied to the economies of the countries and dollar, so it is easy to trade with it on the news. Also, you can keep a portfolio of different cryptocurrencies and periodically re-balance positions. As you know, as of March 2020, the prices of Bitcoin and other major cryptos declined heavily. However, we are pretty sure that after the crisis is over, the price is going to have a significant increase once again. So, maybe this is the perfect time to invest some money in them and wait for their next big jump.
The Bottom Line
If we take a look back in history, we can see that hard times have always been times that provide people with some exceptional possibilities. It was almost always risky, but it paid off in the end. So, maybe you should take a lesson or two from history and start chasing your opportunities. We strongly believe that this is one of these moments. History repeats once again. Naturally, your investment wouldn’t be without any risk, but we believe that it is worth to try it out. During peaceful times, this really works, there are no reasons why it shouldn’t work now. As you probably know, the world of finance is full of opportunities. Take your time to analyze them and make a good profit. Good luck!