Stock Market 2020: A True Picture Of The Stock Market In 2020
2020 has been a fascinating ordeal. In fact, it has been an upheaval. While the start of 2020 wasn’t that bad, soon, 2020 was hit by one of the biggest epidemics in history in the world: coronavirus. Since everything shut off soon after that, within two months of 2020, a lot of people lost their jobs and markets nearly collapsed.
However, from May to now June, markets are slowly coming back to normal.
Since stock markets are now coming back to normal, a picture of the stock market shows that markets are gaining momentum, indices are reclining back to normalcy and industries are picking speed. Investors are thereby picking momentum and their confidence in the stock market is being reinstated.
Investing In The Stock Market In 2020
If you want to invest in the stock market in 2020, it is advisable that you start from scratch, if you haven’t already. If you have a portfolio, it is better to disintegrate it and check your investments and then start building upon in.
On the other hand, if you are starting from scratch, then you must have a solid investment plan. You should decide how much money you want to put in your investment basket and think about which kind of stocks to go for, which industries to look out for, and what to go ahead with it. Plan first and then invest.
If we are talking about 2020, you should be looking out for the biotechnology industry, the marijuana industry, the artificial intelligence industry, oil and gas exploration, and the real estate, in particular.
Try to invest in stocks of these industries. Furthermore, if you cannot afford expensive stocks, try to go for companies that are small-mid-sized and whose stock is closer to the stocks of these industries. As an investor, you might want to check out commodities for investment purposes.
Furthermore, in 2020, you should maintain your portfolios by being as diverse as possible. Try to invest in different stock options, not just one. Go for stocks or ETFs, perhaps REITS, the CDs, money market accounts, the S&P 500 Index Fund, dividend-paying stocks, and growth stocks amongst others.
You can also invest in treasury securities or government bonds, to ensure that you are not divulging your money in one thing.
In 2020, you should try to invest in stocks that have meaning, commodities, different types of securities, and so on and so forth.
Furthermore, 2020 is going to be unpredictable so you should invest in companies that are as sound and legit as possible. Don’t take risks and walk straight in line and you will be good to go.
Key To A Successful Portfolio In 2020: Diversification
Furthermore, in 2020, you should be diversifying your portfolios as much as possible.
The reason for this is that when you put your money in one thing, say stocks, and stocks underperform, you will be on the losing end automatically. Perhaps, all that you invested in might go down the drain right away. The will be irrecoverable.
On the other hand, if you choose to diversify, your money will be widespread and you won’t lose money with a slight change in the stock market.
Authenticity is key in the stock market. There are so many investors out there who have tried all kinds of techniques and are sitting on their investment baskets, blank, wondering what to do to make things work.
If we are talking about the stock market, and especially in 2020, it goes without saying that it is important that you stay specific and hold your own investments together. You should have an investment basket, one that you can experiment with but one that is unique, so it showcases well at the stock market and pulls through wisely too.
Having an investment basket is better than having one or two loose investments.
The idea is to have a diverse portfolio, where you can put your money in different things, say stocks, ETFs, mutual funds, security deposits, cryptocurrency, and so on. This will also make you gain more than you have invested. You can literally see your portfolio rise if you diversify.
Contrarily, if you have a loose portfolio, you will bear the brunt of the market. It is better that you stay clear from the market than invest haphazardly.
The stock market is competitive. Though a unique basket will help you hold for long at the stock market, the stock market is competitive and only the strong survive.
Financial Terms You Should Know
Furthermore, if we are talking about the stock market, here are a few important financial terms you should know of before or while investing:
Compound interest is the total interest you pay on the money you have deposited or borrowed.
It is usually the amount of money you have deposited on the amount you have invested or saved. Compound interest, then, helps you rake good money over a certain period of time.
The case is similar as is the case in borrowing. When you are borrowing, it is the total amount’ of money you charge on the total amount of money you are loaned. Compound interest works both ways. It is good for both depositors and investors.
Net worth is the difference between your assets and liabilities. It is the difference between what you own and what you owe.
By calculating your net worth, you get a good idea of what you own so that you can invest that into other proportions subsequently.
Capital gains are the worth of something today versus how much it was bought for. It can be categorized under depreciation but an important term to realize and know before you invest. This is because capital gains help you make decisions about your assets wisely.
A capital loss is the opposite of that.
A capital loss is a decrease in the amount of an asset or its investment value since you purchased it or made it. Both terms are important to know and realize before you start investing.
Furthermore, asset allocation is where you decide to put your money/cash in.
There are three asset classes including stocks, bonds, and cash. Each performs differently on the stock market.
You should always make an investment that is in line with your performance goals. You must have a plan, first, to realize where you want to go with your investments. In that plan, it is necessary that you have the total amount written, the amount you are willing to invest in stocks, and the stock market as well.
Then, you choose your stocks wisely.
The stock market is pretty diverse and the numbers of options in the stock market are also very diverse. You should, thereby, go ahead with your decisions to invest wisely, however, before that you should be clear about your investments and expectations.
The best advice for all investors is to diversify their portfolios. As mentioned earlier, stocks are the most viable options for investment for they are cheaper. However, they are a little ‘more volatile’. On the other hand, assets are a good investment, though they do not provide instant cash. They are just a token of your money saved. You can cash upon an asset at a later point in time. However, assets don’t grant returns. They are, however, a favorite type of investment.
Similarly, bonds are a type of investment in which you buy it in exchange for money lent to the organization that issues it.
You are paid in interest, for the total amount of money you have invested in the loan.
After the bond reaches the date of maturity, the issuer of the bond not just pays the principal but also the total amount of the loan.
FICO is used as an acronym for Fair Isaac Corp. The score is based on several factors such as the payment history, length of the total credit history, and the amount you owe.
Usually, the FICO score ranges from 300 to 850. The score is based on many factors including the payment history, the total length of the credit history, and the total amount owed.
Those with lower scores have a hard time securing a favorable interest rate by the lending organization and so on. One with a higher rate is the one you should secure.
Term Life Insurance
Term life insurance renders coverage over a specific period of time. This is anywhere between 5-30 years.
Once you have signed up for term life insurance and you die within a specific time, your beneficiaries will receive a payout. If you do not, the policy will expire and perhaps without any value.
Term life insurance is also a popular term used in the stock market.
Alongside these, other important financial terms you should know are:
EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortization), GAAP (Generally accepted accounting principles), EPS (earnings per share), mutual funds, retirement plans, options, annuities, cryptocurrencies, and commodities.
As of 2020, when the markets have thoroughly been shaken because of the coronavirus upset, things will be challenging.
As an investor, you might want to put your money into something that is not just secure but steady and something that provides some kinds of returns by the end of the month.
It is always good to have some sort of income stream (additional), alongside the usual source of earning money or income.
If you ask me, a lot of investors tend to simply go for stocks or companies that pay dividends in order to ensure that they get some sort of income monthly to save it for the future. While for that an investor will need to invest more, the other option is to directly invest in stocks and ‘play along’, along the rise and fall of the stock price to earn money. Going for dividend stocks is a better feat; however, if you are aiming at the stock market, then there are certain procedures you need to follow that will help you earn good money.
While normal stocks are good for investment, other types of investments that can help you earn good money include the following:
- High yield saving accounts
- Certificate of deposits
- Municipal bond funds
- S&P 500 index funds
- Government bond funds
- Treasury securities
- Dividend stock funds
- Nasdaq 100 index funds
- Short term corporate bond funds
- Rental housing
The best investment in 2020 could be ETFs. These are exchange-traded funds that comprise a collection of company’s stock together.
It becomes safer to invest in ETFs, for one ETF might be holding a collection of securities that you want to invest in. For example, the S&P 500 mutual fund contains stocks of important companies such as Vanguard 500 Index Investor Share Class (VFINX), Fidelity 500 Index Fund (FXAIX), iShares S&P 500 Index Fund (BSPAX), T.Rowe Price Equity Index 500 Fund (PREIX) and so on.
It is better to invest in mutual funds than normal company stocks for they are reliable, steady, and they grant safety to your stock basket.
ETFs help in securing your income. They make your investment reliable and securer.
When there is a drop in the stock market, individually, your investment portfolio will not drop if you diversify.
Rather when you invest in a fund, along with stocks and other securities, even if one company exhibits a decline, others will catch up and rebalance the portfolio or perhaps re-balance it or change the losses to gains and so on.
Which Kind Of Stocks Should You Invest In 2020
Furthermore, in 2020, you should be eyeing the following stocks:
- Common Stock
- Preferred Stock
- Blue-chip stocks
- Speculative stocks
- Growth stocks
- Value stocks
- Income stocks
- Penny stocks
- Cyclical stocks
Amongst the aforementioned stocks, here are the most preferable ones.
- Common stock is a part of the company’s stock. It is a stock that grants you ownership in a corporation. Holding some part of the company stock grants your leadership in the company. Common stocks grant you longer returns. However, if you want to cash on them, they are only cashable after a certain period of time, after preferred stocks, perhaps, because they pay you more but are liquid-able after a certain period of time. Also, preferred stocks are stocks that help you get paid in dividends, where you can choose which type of stock to go for a company. Common stocks grant you direct ownership in the company. You get paid more for them but they can be liquefied after a specific period of time, which is their slight drawback.
- Blue Chip Stocks: Blue-chip stocks are stocks of bigger companies that are a part of the global investment fund or the world. Essentially, these companies are bigger in size and they have a higher market cap and a higher market share. These are safer to invest in, however, require more money if you want to get started on investing in them. Blue-chip stocks are of companies that hold a bigger share in the stock market.
- Penny stocks are stocks that are less expensive. They are affordable and belong to companies that are perhaps, starting out. For they are inexpensive, they grant you an easier way of getting involved in the stock market. In 2020, when companies finally begin to come back to their natural selves and business activity jumps, investing in penny stocks will help you reap and rake good profits. It is also a good idea to hold more of them so that they can add to your portfolio in abundance. In the case of penny stocks, you can hold more of a company’s stock together and get paid more for what you hold. These companies are easier to invest in for their stocks are cheaper. Furthermore, they are a part of a bigger process. For instance, if you are starting out and want to invest in petroleum, what you can do is find a matching small to mid-sized company and invest in their penny stock to hold more shares and wait for the shares to go up, whereas penny stocks are thinly traded but can help you make big money by making up on smaller gains.
Other types of important stocks include speculative stocks, growth stocks, value stocks, income stocks, and cyclical stocks.
Speculative stocks move on the movement of speculation about current stocks, growth stocks move on the growth of certain stocks, value stocks are valuable and move with the rise and fall of a company’s stock and similarly, income stocks and cyclical stocks are also similar but different kinds of stocks.
If you are an investor willing and looking to invest in 2020, the aforementioned stocks will suffice. However, if you are really looking to build a portfolio, common stocks, preferred stocks, dividend stocks, penny stocks, and blue-chip stocks are the best ones to go for.
Making it easier for you, if you want to invest in 2020, here are the top companies to go for:
Harte Hanks Inc. (HHS)
Harte Hanks (HHS) is a marketing firm, well known for its well-produced videos, customer reach, and scope. Marketing firms like Harte Hanks Inc. (HHS) will have a lot to exhibit in the coming months for the business activity will be high and a lot of people will be trying to communicate for various reasons.
If we look at Harte Hanks Inc. (HHS) in particular, May and June were good months for the company and there is no reason to doubt rise in its performance in the coming months as well.
Harte Hanks Inc. could benefit from the spread of viral videos, marketing videos, quicker sales, use of online gear and mediums, and so on. Therefore, Harte Hanks Inc. (HHS) is a company to watch in 2020.
Zovio Inc. (ZVO)
Education technology company Zovio Inc. (ZVO), at the stock exchange, today, was higher 92% from last month.
Online education company’s, Zovio Inc. (ZVO) stock is due to rise in the months to come for people are using different types of educational tools online and online mediums such as Skype, team viewer, zoom and others to communicate.
Zovio Inc. (Nasdaq: ZVO) essentially is an education technology services company that partners with different higher education institutions to deliver authentic, innovative, and personalized solutions to help learners and leaders achieve what they aspire to achieve.
With a customer base of 1500 employees, Zovio’s demand will rise in the coming run for it belongs to the education industry and for education will be in demand in the time to come, especially online education and respective tools.
Carvana (CVNA), again, is a very well-integrated company. Worth your time and money, it is a new-age company that delivers its services at the palm of your hands.
It is the digital age today and Carvana is one company that is going to meet your feat that way.
Carvana is a company related to the ‘automobile industry’. First come first, Carvana (CVNA) pretty much offers you the facility to buy an automobile online.
In the upcoming time, a lot of people might be shifting gears to other cities for work and employment. They will need real estate and proper cars to commute.
When you go to retail stores to shop, it takes more time and more effort. However, in the case of Carvana, you will have the option to get your stuff right away.
Carvana makes it easy for you to get a car and it offers money-back guarantee too. There is a lot to look forward to in 2020 and Carvana is a company you would want to invest in.
Listed on the stock exchange, Carvana Co. (NYSE: CVNA) as $111.21, Carvana has performed well in the past 6 months. Furthermore, it is due to perform well in the coming run as well.
Though an expensive stock in a competitive market, Carvana (CVNA) might be one of the best choices of investments in 2020.
Amazon (AMZN) is a company worth your money right away. It is a company that holds true volume despite difficult concerns. It has been operational for years now. In fact, since Amazon is an online, e-commerce company, people have been making the most out of it for the last few months as well due to the coronavirus upset.
Amazon (AMZN) holds itself as a top contender in the e-commerce industries and venture.
Available at the NASDAQ (NASDAQ: AMZN), the company’s stock price is valued at $2,545.02 USD. In the past 6 months, its performance has been in the green.
The company has had a good run and is a pretty stable company. It is worth your money. However, if you are ‘starting out’, it may be difficult to invest in AMZN since its share price is quite high.
On the other hand, if you are an established investor, there is no reason for you to not go for Amazon (AMZN) as your prime choice of investment in 2020.
A cloud storage company, Dropbox (DBX) is a very prominent name amidst tech enthusiasts. It is a platform that helps you store and access files without essentially having direct access to these files. Dropbox (DBX) is a very popular name in the tech industry. Since technology isn’t going anywhere and neither are the coming few years, Dropbox is a company whose stock you must watch.
With an affordable stock price, (NASDAQ: DBX), ($21.03), Dropbox (DBX) has been performing wisely well at the stock exchange. In the coming few months, where data will be tricky and people will be extra careful about where they are storing their files (especially big companies), the need for using Dropbox may arise duly and importantly. Therefore, Dropbox stock is one you should invest in today.
The best part?
Its stock is very affordable, so you can perhaps get plenty of its stock and play on the movements of the stock market index.
Dropbox stock has perhaps seen a $1-3 rise between the last 6 months, which is quite steady to realize that this stock can help you rake money by its own buy and sell at the stock exchange. Dropbox (DBX), therefore, is another recommendation for 2020.
Microsoft (MSFT) is a name that never goes out of fashion. The company has a valuation of over billions of dollars. It is a company that is contending with Apple and other companies well in the league because its OS is running on systems that are cheaper.
Microsoft (MSFT) shares at the (NASDAQ: MSFT) are priced at $187.74. In the last 6 months, people have been working online. Furthermore, a lot of people are working from home, and, therefore, the demand for electronics such as laptops has been on a high. Therefore, Microsoft is a company that is reliable. Its stock is also affordable.
Paying a decent dividend yield, Microsoft (MSFT) has hit successive highs in the last few months. Furthermore, the devices it runs on are cheaper; they are more affordable, which automatically drives its shares higher.
Microsoft, therefore, is a wise investment for and in 2020.
Alibaba Group Holding (BABA)
E-commerce giant Alibaba Group Holding (BABA) is a Chinese company whose stock is categorized as a blue-chip stock. Alibaba’s global presence is significant. Its presence and delivery are present across the globe.
Alibaba Group Holding (BABA) has a stock price of $217.64. In the last 6 months, its value has been in the green. It has seen some highs and lows but more or less, it has stayed positive.
For the rest of the year as well, Alibaba is a name that you should not forget. This is because online shopping will be at its peak in the coming 8-9 months.
Alibaba stock is literally a safety stock. Its stock is valued high above of other tech giants. It is one of the eCommerce industry conglomerates that have a huge web presence. It will continue to shine and outshine, however, it will remain stable.
Therefore, if you want something to be a part of your stock basket, Alibaba (BABA) should be one. This is because it will add stability to your basket and keep your investments stable.
Cryptocurrency: Investing In Cryptocurrency In 2020
Another popular domain of investing in 2020 is going to be investing in cryptocurrency.
Most people enjoy investing in cryptocurrency for it is one of the most popular types of investments today. It helps you make and rake good money as well.
If you are wondering about which types of cryptocurrency to go for in 2020, here are the top 4 to invest in:
On May 8, Bitcoin (BTC) reached a value of $10,000, however, shortly, it fell to $8,600. Then, it rose to $9,400. While Bitcoin has many derivatives now, Bitcoin (BTC) is expensive but sturdy. It is one of the most favorable types of crypto investments in the world today.
If you want to invest in Bitcoin, keep it as an investment for 6 months and you will be good to go. Furthermore, it’s derivate’ are not such an exceptional choice because Bitcoin is the most popular in the world today and its derivatives might lose value for they are competing with other cryptos that are priced the same or less perhaps. Bitcoin is still popular and goes unmatched.
Ethereum (ETH) is also a top performer. Ethereum is a highlight in the crypto world for Ethereum, ethanol, and others are used in most applications, tools, and accessories.
Ethereum is very affordable. In fact, since Bitcoin is a league of its own, Ethereum is a second to none. It is workable; it is going to rise in demand for the components of it are such that are a part of daily appliances. Ethereum, is, therefore, an investors’ top pick in crypto for investments in 2020.
Ripple crashed May 10, when all major cryptocurrency coins fell short. Essentially, the liquidation of BTC led to a drop in all major cryptocurrencies.
The stock market has had a tricky run in 2020. However, thanks to big companies such as Amazon, Apple, Facebook, and others, we have access to their stock to earn money even if we are dealing with other problems in our economy.
The stock market will never go out of fashion, for it provides people, with a medium to invest and earn on the side, along with having normal, regular incomes.
While from 2018 to 2020, things have been tough but people have literally had enough. Now, people and businesses will talk. There will be progressive growth and no one will be stopping at what they want to get.
To Conclude: Picture Of The Stock Market 2020
To conclude then:
The stock market is a safe haven for most investors. Today, at the stock market, there are thousands of individuals who are trading in stocks, ETFs, mutual funds, security deposits, and securities in general and perhaps, cryptocurrencies as well.
We are going to stay with the saying ‘Old Is Gold’ when it comes to the stock market. The concept of cryptocurrency is relatively new so most people are aloof to it.
However, in 2020, people should stay with common stocks and mutual funds, ETFs, and dividend stocks to build a good portfolio.
If you invest in one stock, it won’t help you reap much. What you need to do is an experiment, experiment, and experiment. This, by and in itself, is a hard and fast rule of the stock market itself.
The key to having a successful portfolio in 2020 will be to diversify. For that, you can invest in normal stocks (to keep things flowing), ETFs, for greater security, bonds, for having something concrete and irreversible for a ‘certain period of time’, assets, for long term investments and perhaps security deposits for current and long term trading.
According to recent reports, the stock market is now recovering. What is going to make it recover further, is the fact that the stock market is going to benefit from the gains of companies that will have a lot to offer in the coming few months.
Take, for example, Apple, whose stock is going to increase for its yearly launch is not too far away.
Secondly, Apple (AAPL) has bounced back and is now on its position before corona hit the markets and everything went in the dump.
The same goes for marketing firms, automobile firms, pharmaceutical industries, aviation industry, automobile industry for people will now be traveling a lot, for all purposes and the automobile industry for they will start commuting more for employment.
Real estate is another sector you should be targeting. People will now be mortgaging homes than buying them. The money will be in the hands of a certain few, whoever makes it to the top will reign.
Freelancing companies, work from home companies, companies that provide software technology, and others are also going to benefit from the rest of the year and for at least a year or two to come.
The stock market is a very intriguing place. Once you get into it, you will never have enough. However, the idea is for you to understand how to trade and then work your way up to success.
To have a good run at the stock market, you must always know how much you are willing to invest, and then you should go ahead with investments. Always have a basket which comprises of guaranteed investments and there is no limit to investing. Furthermore, take investment as a side business or side income to what you are working on currently and there is no reason to doubt that investments will not work.
Start investing and you will be amazed to realize how much you can learn and earn from it.