Where to invest in 2021 is a question that not only newcomers to investing ask themselves, but also experienced investors.
And if for experienced investors the question is about trend overviews, because most of them have their investment plan, then for newcomers this question sounds like “where to start for a newcomer to investing“.
Yes, many have watched the crises of 1998 and 2008, the steep peak in the market in 2020, and I don’t think anyone wants to get into the wrong trend or lose their savings by choosing the wrong asset.
I hasten to reassure newcomers right away. There are basic investing principles, and if you follow them, given your risk tolerance, you will keep your money with the proper level of risk.
One of the basic principles of investing is “don’t put all your eggs in one basket.” Everyone probably understands that focusing on just one asset greatly increases risk.
As a financial advisor, people often come to me with different stories. For example, one beginning investor had 10,000 dollars to invest. Without thinking twice, he bought one share of a very good company with all that money. The company was a good one, but all of his money ended up in one single asset.
And the stock is not a static asset. Their price changes every day, when they are traded on the stock exchange. You can’t get rid of even half of the assets, in this case, to reduce the risk. You cannot sell half of a share. As usual, the price fell, and the novice investor grew anxious about his improvised portfolio. He let me tell him about his example, by the way, so that other beginners would think about it and not repeat his mistakes.
How and where to invest
Shares are worth an average of 2-3 thousand dollars and a diversified, diversified portfolio could be created for 10,000 dollars by adding instruments with different risk levels. I discuss this approach, by the way, in our basic course.
So, despite the current trends in 2021, I’ll answer the question “Where to invest a newcomer in 2021” with a checklist:
- Invest small amounts;
- Buy simple instruments: Bonds, stocks, funds;
- Invest in different instruments;
- Don’t rush into one asset that the crowd is running and even recommended by this or that blogger.
- Listen to different data sources.
- Do not buy tools just because they are trendy, investments are not a matter of fashion.
- Do not chase after super profitability. Because the higher the profitability, the higher the risk. I will probably disappoint you, but all this talk about passive income is a myth. You always have to work on an asset, even picking stocks or bonds is work.
- GIVE up trading in favor of investing. Trading is a profession and for large capitals, anything you may be told about profitability in trading for beginners is a myth.
- Determine the goals of investing. Without a goal, there is no goal to achieve.
- Determine your risk profile and Make an investment plan and go with it.
- Understand your risk profile, also what and how you will invest, what ratio of instruments you will have in your portfolio, you will struggle. A non-systematic approach either leads to losses or kills the intention to invest.
But since I am known precisely for being good at trend analysis and understanding how the economy and markets work, I won’t leave you without my brief overview of 2021 and the state of the global economy in general and the stock market in particular.
Overall, 2021 is a continuation of the trends shaped by the constraints that emerged in 2020. Understand, the challenges that were formed in 2020 are not yet passed in 2021 at this point.
I talk about this on my live shows and in my Instagram account posts and I keep repeating it. There is still a disconnect between the real market, the economies of the world, and the stock market, the market where trading takes place. And this disconnect at the moment, at the moment of writing this article, hasn’t gone anywhere.
There are still risks of big changes on the market, in the price of assets, the probability of financial bubbles (watch my video review of the IT industry on Instagram, it is relevant). So especially beginners should be absolutely careful when making decisions when buying this or that asset. Don’t rush in with your head, make weighted decisions and follow my broadcasts.