Top Investment Trends for 2020
Geopolitical events have influenced the markets in 2019 and this is likely to continue as 2020 approaches because many of them remain unresolved. Financial markets could be faced with a year of volatility, and this may create great opportunities for traders, and means that investors may need to be well prepared.
Technological advancements are also likely to play a big part and in 2020, we are likely to see more disruptions of old business models and new trends that may shape the future.
Geopolitical events may impact Traders & Investors in 2020:
Trade war between US & China, US Presidential elections, Brexit, Global recession, Political unrest
Top disruptive Technologies in 2020 may include:
Artificial Intelligence, Robotics, Blockchain Technology, Genome Sequencing, Energy Storage.
Expected opportunities for traders in 2020:
Bitcoin - Prices have more than doubled in 2019. Market volatility could present an upside for traders. Click here for a 0% trading fee with eToro (eToro is a Safe & Regulated broker)
Energy Stocks - Homes and offices may start using mostly lithium-ion batteries and larger scale utilities will use vanadium redox flow batteries (VRFBs) over the next five years. Click here to view the energy stock market
Commodities - There’s still a strong demand for oil across the globe. A successful treaty between OPEC and non-OPEC countries, as well as less oil production from competitive markets has contributed to the recovery of the oil and gas sector. Click here to view the commodities stock market
FOREX - The currency to watch is the Australian dollar. Australia’s export market relies heavily on China which means the Aussie dollar could benefit from a resolution to the China-US trade war. Click here to view the FOREX market
The geopolitical events in 2020 that could impact traders and investors
The trade war between the US and China: This trade war is one of the greatest concerns as the two largest economies in the world try to work out a trade deal to satisfy both parties and impose tariffs on products.
US presidential election: The election will take place in November, which means it may have an increasing effect as the year goes by. With President Donald Trump facing the possibility of impeachment, the situation is volatile.
Brexit: Long after the 2016 referendum, Brexit is still unresolved. The December general election has seen all possibilities back on the table, from an exit deal and another referendum to no-deal, which businesses fear most.
Growing fears of global recession: Global economic growth continues to slow and many investors have fears about a global recession beginning before 2020 ends.
Political unrest: In many countries around the world, voters are protesting and making their voices heard. The battle between protesters in Hong Kong and the Chinese government has become increasingly violent and “Gilet Jaune” protests in France have been going for over a year.
Top disruptive technologies for 2020
The top five disruptive technologies for 2020 according to Ark-Invest are:
Opportunities for traders and investors in 2020:
#1 Investing in Bitcoin in 2020
Cryptocurrencies are pretty much a new asset class, although the CFTC considers them a commodity and the IRS considers them as property.
What is interesting about Bitcoin is that it is governed by a protocol run by a distributed network unlike fiat currencies which are dictated by government monetary policy. Its decentralized nature could be useful in a time of economic uncertainty and geopolitical events. Its price is also uncorrelated to that of any other asset.
Bitcoin prices have more than doubled in 2019, far outpacing the 31 percent return for U.S. tech stocks, which Goldman Sachs deems the best-performing asset class year-to-date.
Executives at data firm Messari say bitcoin prices could rally to a new high in the year’s remaining months, topping the $12,902 level reached in June. Of course, past performance does not always indicate future performance in the investment world. If you want to start trading Bitcoin we recommend only using a regulated & secure broker. One of the leading brokers of 2019 was eToro , with over 6 million users. They also offer FREE registration with demo account for beginners.
#2 Investing in energy stocks in 2020
Although stock markets have shown some strong increases, growth in the last six months of the year has been less pronounced and there is widespread agreement that 2020 is likely to be a tougher year. The appetite of investors for stocks relying on share price appreciation could weaken.
Invest in growth and value stocks
There are still industries that may be worth investing in that show strong fundamentals over the long term. A heightened awareness of climate change could boost renewal energy stocks as governments focus on green policies. The efforts to curb global warming require systemic and behavioral changes that may offer opportunities for investors.
As more countries offer 5G technology – vital for most technological breakthroughs - stocks developing new technologies could rise higher in 2020.
Tesla is revolutionizing the automotive industry. Electric car sales grew 72% in 2018 and electrification is likely to spread throughout the transport sector. Bloomberg is expecting Battery Electric Vehicles (BEVs) to grow the most.
Energy storage is also forecast by some investors to grow strongly. The energy business of Tesla could reach the same size or greater than its automotive sector.
Homes and offices could start using mostly lithium-ion batteries and larger scale utilities will use vanadium redox flow batteries (VRFBs) over the next five years. The stocks of battery manufacturers and electric vehicle metal miners are likely to rise fast.
It may be useful to look for stocks that are set to reach key milestones in the year to come, such as securing regulatory approval or beginning production. If you can find good quality stocks that have fallen out of favor over the short term, you could find a cheap entry point. For example, the FTSE 100 has underperformed mostly due to Brexit and it may be a good idea to buy UK blue-chip stocks in hopes of benefiting from any reversals, depending on the outcomes of the election and Brexit negotiations.
#3 Trading commodities in 2020
In its October update, the World Bank said that trade tensions, and less growth in manufacturing and output was weighing on the demand for commodities. There is, however, still a strong demand for oil across the globe. A successful treaty between OPEC and non-OPEC countries, as well as less oil production from competitive markets may contribute to the recovery of the oil and gas sector.
#4 Trading forex in 2020
The dollar has been strong for many years and even Trump has said it needs to weaken to make American manufacturers and exporters more competitive on the world stage. Any weakness in the dollar may benefit emerging currencies in 2020. Another currency to watch is the Australian dollar. Australia’s export market relies heavily on China which means the Aussie dollar could benefit from a resolution to the China-US trade war. Sterling continues to be volatile and if the conservatives remain in power and proceed with Brexit, this could lead to more certainty and support for the pound against the Euro. Delays have had a negative effect on the pound and any hopes of some certainty help to support it.
A final word
In the 2020s, we could see many changes in how markets, governments and companies operate. We may see economic, environmental, political and social systems facing many challenges. To remain resilient in 2020 and beyond, investors may need to embrace a holistic approach and be well prepared due to the expected volatility of the markets.