2020 was a bittersweet year for investors all over the world. While some recorded an increase in ROIs, many others incurred significant losses. The COVID-19 pandemic taught us to invest wisely and take calculated risks when making long-term investments. The truth is that no one can predict the future of the market. Even with data analytics, attempting to do so comes with many risks. On that note, this article explores ways to become a smart investor in 2021.
Monitor Investment Trends
While it’s advisable not to get entangled in the latest hot stocks and investment trends, it’s impossible to ignore the trends completely. For instance, the emergence of the COVID-19 vaccine saw a significant increase in pharmaceutical stocks. Similarly, increased economic activity saw a surge in travel stocks.
The recent surge in demand for sustainable goods presents an excellent investment opportunity for investors. Countless consumers are increasingly looking for ways to preserve the planet with their consumer decisions. Studies show that search engine results for sustainable goods have increased by 71% in the past five years. This trend is visible in both advanced and developing economies. The best part is that consumers don’t know the plant-friendly options available to them. COVID-19 created a new market in the sustainable home improvement industry.
Consider investing in companies that deal in quality sustainable products. Take, for example, GoodLeap. It's a reputable home solutions marketplace. Goodleap’s proprietary technology platform serves homeowners looking for sustainable home upgrades. GoodLeap also offers flexible payment options for sustainable home improvement products such as energy systems, battery storage devices, modern HVAC systems, and smart home devices.
Digitize Your Assets
Following the recent increase in spending on commodities and the rate at which countries have been printing money, market analysts forecast hyperinflation and money eventually losing its value. Studies show that the United States printed 35% of all U.S dollars ever created in 2020. This practice has set the dollar up for a potential dip in purchasing power.
With that in mind, keeping money in cash doesn’t seem like the brightest thing to do. Fortunately, cryptocurrency has proven to be a viable alternative to traditional currency. Despite its recent volatility, crypto assets remain a solid investment prospect. Bear in mind that you should have a safe and secure place to store your digital assets. The best way to secure your digital currency is to use a cryptocurrency wallet. All cryptocurrencies exist on a decentralized platform called a blockchain. Your wallet gives you a private key that proves your ownership of the crypto.
Crypto wallets are of various types. You can go for either a desktop wallet, mobile wallet, or online wallet. When looking for the best cryptocurrency wallet, experts recommend choosing a hardware wallet. This type of wallet is considered the best crypto wallet because it’s a combination of a friendly user interface and the security of an offline storage device. Beginners and advanced users can conveniently use a hardware crypto wallet.
After extensive research, we believe the best crypto wallet 2021 is Ledger Nano X, and it doubles as the best bitcoin wallet. The Nano X is an upgrade from Ledger’s first hardware wallet, Ledger Nano S. Nano X’s Bluetooth connectivity feature allows for integration with a mobile platform. That means you can conduct bitcoin transactions, like checking your principal balance, using your mobile device instead of a desktop computer.
In addition to Bitcoin, the Ledger Nano X can store different cryptocurrencies like Ethereum, Bitcoin Cash, Ripple, and Litecoin. The device comes with improved security features that boost its level of security to mitigate security breaches.
Lookout for Inflation Trends
The value of one dollar today won't be the same in 10 years due to inflation. Inflation reduces the purchasing power of a specific amount of currency. Also, inflation is a natural phenomenon in the market economy. Intelligent investors are increasingly exploring investments to hedge against inflation. Consider investing in asset classes with the potential to outperform the market during inflation. Having inflation-hedged assets in your investment portfolio can help your portfolio thrive during inflationary climates.
One way to hedge against inflation is to invest in traditional hedges like real estate, gold, consumer commodities, and leveraged loans. For example, in 2020, real estate prices skyrocketed in virtually all advanced economies. More so, real estate income surges with inflation because as inflation rises, so does the value of a property.