There is no question about it: We are living in absolutely fascinating times. The current bizarre state of the world has made an important impact on the stock market and investing overall. Indeed, the state of investing in 2021 can best be summarized as both confusing and exciting – there are plenty of pitfalls, but also ample opportunities.
The Continued Impact of COVID-19
Thankfully, COVID-19’s impact on the stock market seems to be fading. Even companies that saw skyrocketing growth during the pandemic – such as Zoom – are warning that their performance may begin to dip back to pre-pandemic times. Furthermore, other stocks that were devastated by the pandemic – such as the tourism and hospitality industry – are slowly beginning to recover. This is happening thanks to improving vaccination rates and stronger-than-expect economic performances. Furthermore, there is no question that there is a variety of pent-up demand, and now that people can safely spend money and go to places again, they are starting to do so.
Furthermore, the fiscal stimulus that kept tens of millions of people financially solvent during the pandemic – as well as the robust business assistance plans – are continuing to bear fruit. All of this is helping the economy grow, meaning that the stock market is, in general, relatively strong. How the economy will perform as governments start to reopen and let go of generous social safety programs remains to be seen, however, and savvy investors should keep an eye on these potentially dangerous moments.
Retail investors made their impact felt during the pandemic, changing the way in which stocks were invested. This was present in the startling rise of stocks like GameStop, AME, and Blackberry – stock movements that were largely influenced by retail investors who were essentially gamifying the market.
These retail investors have also been helped by a variety of apps that have made it easier to buy cryptos. Thanks to these apps, and the massive spike in society media activity that surrounds apps like these, more and more people are investing in a slew of Cryptocurrency. This can be dangerous, however: The crypto market is extremely volatile and loaded with bad actors. Countless inexperienced investors have found themselves on the wrong end of a bad trade.
Furthermore, The demographic of the stock market is changing. According to a survey conducted by the experts at Money Morning, younger investors want to invest: “Respondents in the youngest age group we surveyed are willing to invest the highest percentage of their money compared to other age groups.” This demographic is also likely to use an app or website to invest on their own, no longer feeling as if they need to confine themselves to predetermined strategies that have been set by their financial advisors.
Here’s the truth: There is no one-size-fits-all model for investing. There is no set strategy that will guarantee you wealth or income, because at the end of the day, investing has to be confined to your goals, wishes, and desires.
The strategy you select must shift based on your goal. Looking for steady income, but conservative growth? Find a healthy dividend ETF with low fees. Willing to take a chance and have a few bucks that you can comfortably lose? Check out high-growth stocks, growing markets, or cryptos.
At the end of the day, every investor must pay attention to their own needs and risk tolerance, then develop a strategy that best fits their portfolio. The advice of experts cannot be simply discarded – indeed, generally speaking, individuals should rely on expert opinion and do heavy research before investing a dime of their own money.