Записи по метке : "#investments"

Industries in 2020: Who Is Going to Survive After the Pandemic 19.07.2020

The COVID-19 pandemic, along with the oil price crash due to the price war between Russia and Saudi Arabia, negatively affected almost all industries. Some of them are already at the edge of where they will never recover. According to USA Today, this year may be one of the busiest ones for Chapter 11 bankruptcy filings since the Great Recession. Let’s determine which industries may become a safe haven for investors and which ones are not likely to return to their previous positions.

Difficult to Recover

We will begin with the industries that have been suffering the most. According to analysts, it may take more than five years for the sectors under the most significant pressure to return to the levels of 2019.  

Oil and Gas

As we mentioned above, oil prices plunged due to the conflict between Russia and Saudi Arabia. The value of the WTI benchmark fell below 0 for the first time in history. At the same time, almost every country in the world imposed restrictions on the movements between countries and even within the state. Air traffic has decreased significantly; people stay at home and use their cars much less than before. Public transport was closed or limited in many countries as well.

The decline in movement leads to limited fuel demand. As a result, many oil and gas companies have filed for bankruptcy protection. For instance, Sable Permian Resources Finance, Chesapeake Energy, and Extraction Oil and Gas have all undergone the filing process. Currently, the largest US banks actually gave up lending to suffering oil and gas companies.

Such giants as Citibank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo almost simultaneously canceled investments in the oil and gas industry. Thus, experts predict more bankruptcies of oil and gas companies.

Although OPEC+ member-states have been trying to push the price up, it’s difficult due to COVID-19. It seems the industry may recover as soon as countries open their borders. Nevertheless, rumors about the second wave of coronavirus indicate more challenges for the oil and gas industry.

Aviation

The weakness of the oil and gas industry interconnects with the aviation sector. Above, we talked about the reduction of movements between countries and cities. International airlines have been dealing with massive layoffs. Although local governments support the industries with benefits packages, it’s not enough to keep employees. Such giants as Lufthansa, LATAM Airline Group, and KLM had to apply to government support and reduce their workforce.

Though some states have eased the lockdown, it’s unlikely the industry will recover soon. The recovery of flights hasn’t encouraged the airlines yet as material losses exceed profits dramatically. If borders close again, more airlines will become bankrupt.

Retailers

Although the reason why retailers have been going through challenges is apparent, still, no one could expect that leading companies such as J.C. Penney, and J. Crew Group Inc. would file for Chapter 11 bankruptcy protection. For example, J.C. Penney has been negotiating the business plan with its lenders to prevent the company from liquidation. The firm has to close nearly 152 stores and fire 1,000 workers.

Lots of people lost their jobs because of the coronavirus. As a result, their income plunged. People began purchasing fewer clothes and accessories. However, it could be expected that leading retailers will survive due to online sales and discounts to allow customers to buy goods at a lower price.

Nevertheless, retailers had to close most of their stores and fire many employees. It’s worth mentioning that other factors besides the pandemic led to bankruptcy filings. However, COVID-19 became the trigger for such procedures.

The Safest Industries to Invest In

what industries are wise to invest in today

We have considered the industries that suffer the most from the coronavirus pandemic. But what about those that may bring suitable investments even in times of crisis? Let’s see what industries are wise to invest in today.

Healthcare

Although the healthcare industry has suffered from the pandemic, people will still need medicine no matter what happens. Moreover, many biotech and medical companies have been working on the COVID-19 vaccine. Thus, the industry may recover soon.

Technologies may expedite the recovery process. Artificial intelligence that will improve medical tools and help doctors reduce labor costs may contribute to the industry’s recovery.  

Technology

We mentioned artificial intelligence, which directly relates to the tech industry. Almost all tech companies, such as Google, Visa, Mastercard, and Amazon, have been suffering the smallest losses. Technologies help them adapt to current conditions. People move to online payments; home delivery becomes more popular. Although losses are inevitable, tech companies will go through the crisis easier than firms of other industries.

New Industries to Invest In

What about new industries? Do they have a chance of outperforming after the crisis ends? Some experts talk about electric cars that may be one of the growing industries to invest in. Despite the fall in the car industry, in March, the number of battery-powered vehicles in Europe increased by 23%. Then, the profits of the sector also declined but less than that of the traditional one. Currently, it’s unclear whether it’s a trend or just a mistake. 

There is a chance that start-ups in this industry will hit the market and become promising investments. Nevertheless, it’s better to wait until the industry confirms its resilience to market vulnerability.  

Conclusion

To conclude, the ongoing pandemic and the crash of oil prices put many industries on the edge of bankruptcy. Many companies won’t recover anymore. However, there is still a chance for some sectors. 

It’s more likely healthcare and tech companies will continue to outperform even if the second wave of coronavirus hits the markets. Currently, they are the safest industries to invest in. Electric cars may become a new industry to consider investing in. However, the confirmation of its resilience is necessary.  

If you are still in doubt about where to invest, Einvestment experts will provide reliable advice and create a profitable portfolio.   

Подробнее

Tags: , ,

An Error Analysis of the Top 5 Retirement Investment Mistakes 10.07.2020

If you ask any investor or trader about their retirement investment mistakes while dealing with money, you will hear plenty of stories. Someone invested in the wrong company, followed unprofessional advice, and so on. The stories of failure are always unique. However, there are common mistakes that every investor does. Let’s consider them to prevent your portfolio from losses.

All This on the Red

One common mistake investors make is putting all their funds into one asset. It happens because one asset looks so attractive that it seems it will bring you a fortune.

Why is it wrong if everything looks perfect? Well, the market is a subject of high volatility. Unexpected news and unpredictable events may lead to enormous market fluctuations. The primary danger lies in the market’s unpredictability.

What should you do? Diversification is one of the most significant investing rules. No matter how excellent an opportunity is, it’s essential to hedge your funds and invest in different markets. It’s crucial for the assets you invest in to experience a negative correlation. Simply put, they move in different directions under the same circumstances. Einvestment experts will make the perfect diversified portfolio for you.

No Proof

These retirement investment mistakes mostly relate to newbie investors. If you hear from your friends or family that an asset or a company has excellent opportunities, and you should hurry up so as not to lose momentum, calm down. What is more dangerous, you can hear such information from so-called professional investors on TV or social networks.

Any investment requires confirmation. Don’t base your decisions on someone’s opinion. It’s vital to check the ground before putting your funds in an asset. If you have heard that stocks of a company will skyrocket in several days, check possible drivers of such a surge. It can be an earnings report, the launch of a new product, and so on.

Second, you should answer two main questions. These are: what you are going to buy and why you do so? No matter how great the opportunity is, if you have no idea about the markets and possible risks, you will lose.

Tip. When you hear that an asset is supposed to rise significantly in the upcoming days, it’s more likely an unprecedented increase won’t happen. Significant market fluctuations happen on unexpected events. If the market is ready and the event is priced-in, enormous movements won’t occur.

Leverage and Margin

Both terms relate to the concept of free money. Lots of brokers, especially Forex ones, offer borrowed money, so your account increases, and you can open bigger trades. It seems reasonable until you suffer losses.

Even brokers don’t hide that leverage brings big profits together with significant risks. Imagine you have a credit card. Would you make investments using it? It’s unlikely. Same with margin and leverage. It’s a credit your broker offers.

However, it doesn’t mean you should avoid using borrowed funds. You better learn more about how leverage and margin work and always use rules of money management.

I Believe They Will Grow One Day

  

It doesn’t matter how many times you have invested; a feeling of greed will always accompany you. It’s impossible to place only successful trades. Thus, you should know how to deal with losses.

One of the main qualities of successful investors is the strength to close positions as soon as the loss exceeds an appropriate level. They had better go and invest in other securities rather than double their failing positions.

To be sure your trade won’t recover, determine the level of loss your account can deal with. As soon as your position overcomes this level, close it. If it just suffers tiny fluctuations and doesn’t surpass the stop loss level, stay calm and wait until the market recovers.

By the way, stop-loss orders are a crucial part of any trade. Although some investors think it’s the unnecessary step that might close their positions at an unfavorable level, you should not neglect it. If you count the level correctly, it will limit your losses, not opportunities.

Retirement Investment Mistake: Time Doesn’t Matter

When investing, time matters in several ways. The crucial thing you should consider is what your aim is. If you invest in order to have some money for retirement, you should consider long-term investments.

What will happen to the market for five, ten, or fifteen years? It will definitely suffer significant market fluctuations. That’s why your account should be able to deal with both enormous gains and losses. 

Second, it may be difficult for you to predict market performance for so many years. That’s why it’s better to apply to experts. Einvestment professionals have in-depth knowledge about current market conditions and years of experience that allows them to build the best-diversified portfolios.

Conclusion

In conclusion, everyone makes mistakes. Mistakes allow you to learn to achieve your targets. However, it’s better to learn not from your own failures but others. This guide won’t protect you from losing trades. Nevertheless, by knowing about the most common mistakes, you can limit the risks.  

Подробнее

Tags: ,

What is an ETF Investing?  06.07.2020

An ETF investing (exchange-traded fund) was first introduced in the late 1980s. After 30 years, ETFs transformed into almost every stock class: bonds, ETF for gold, real estate, and even currencies. Since then, it has been considered to be the ideal tool for beginners. The number of ETFs worldwide reached 6478 with a 6.18tr  dollar value of assets.

So, is an ETF a stock? An ETF is a fund that consists of different assets. Because it is not focused on only one share, an ETF is considered to be a popular tool for diversification portfolios.

An ETF can be focused on a hundred different industries or be based on one type. For a better understanding, we will cover different type of ETFs:

  • Currency ETFs: invest in Canadian dollars, British pounds, or any other currency 
  • Bonds ETFs: might include any government bond or corporate bond
  • Commodity ETFs: ETFs that invest for gold or oil
  • Industry ETF: focus on a particular industry like technology or gas
  • Inverse ETF: trying to gain on the stock declines.

ETF vs. Index Fund: What Is the Difference? 

The main difference between ETFs and index funds is that the latter can be bought or sold only by the price set by the end of the trading day, while an ETF can be traded throughout the day. ETFs are considered more flexible and convenient as they are similar to common stocks on the stock exchange.

Secondly, the index fund or mutual fund usually has higher fees as it is managed by professionals. ETFs do not require much paperwork, nor do they have such large fees. Furthermore, ETFs don’t require special accounts.  

ETFs are easier to manage when compared to index funds. That is why it is so popular among beginners.

How Can ETFs Pay a High Dividend?

Most ETFs pay proportional dividends quarterly. It is also called paying on a “pro-rata” basis. Typically, dividends are paid in cash, but additional shares can be offered. There are two main types of ETFs with dividends:

Qualified dividends: the stock must be held for more than 60 days prior to the ex-dividend date (the date when the stock starts trading without the value of the next dividend payment). Qualified dividends are listed in the Form 1099-DIV form.

Non-qualified dividends: all dividends that fail to qualify for lower-tax-rate. So, if an investor could not find the dividend in the 1099-DIV form, he uses the following formula to calculate the dividend:

Total of Ordinary Dividend = Qualified dividend – Non-qualified dividend.

Example: If a fund reports $300$ of the ordinary dividend and $250 of a qualified dividend, you get $50 off a non-qualified dividend. 

Usually, for investors, there are no issues as to whether or not the dividend is qualified for the U.S. market. For investors who prefer to invest in international companies, the difference can be more significant due to the tax calculation. 

On the other hand, dividends can also be paid monthly in ETF. One of the most popular ways is the real estate investment trust stock. Indeed, the reason for its monthly payment is simple: REIT is considered as non-qualified dividend ETF.

That is why it is important to check not only the list of the best-paid ETFs but also the qualification of its dividends.

What Opportunities Does an ETF Bring in Stocks?

There are several reasons why ETFs are so popular:

Variety

An ETF provides a variety of choices due to its differentiation in classes. Let’s say a man has $2500. He wants to invest in Euro (currency), gold, and the tech industry.

Usually, $2500 would not be enough to invest in stocks, but an ETF gives such opportunities. He can invest $1500 in gold, $500 in Euro, and the rest in tech industries.

For people who are limited in assets but willing to try more, an ETF provides such an opportunity.

Low Fees

Really high fees can push newbies away from investing. An ETF usually has a lower ratio than mutual funds. Many online brokers provide fee-free for ETFs. If you are looking for an investing platform and want to try an ETF, check Einvestment. You can manage your portfolio based on already prepared plans.

Keeping Up with the Trend

ETFs are known for their fast response to new trends and technology. It is the best instrument in case of new, in-demand innovations. 

Liquidity

Most of the ETFs are very liquid. They can be sold or bought throughout the day. This gives investors the opportunity to exit the market as soon as they see a recession. An ETF helps them lose much less than mutual funds.

Invest According to Your Style

Active, passive, or in between. Investors can choose passive management or approach actively in the market for sales and deals.

Three Easy Steps to Invest in ETFs

First, ask yourself: should I buy an ETF or not?

  • If you do not have a minimum of 2000 USD to invest in the mutual fund, yes, you should invest in an ETF.
  • If you have a couple of thousand you want to invest from your 401(k), yes, you should invest in an ETF.

Second, you should think about how to get a good deal.

If you are going to invest in an ETF, you have to check it in the same way as mutual funds.

Check the index track and how long it is constructed. Consider additional costs, such as the total annual expense and broker fees.

Third, know the names of the players.

All providers of ETF call themselves differently. Some of the most popular are:

  • Spiders: also known as SPDR S&P 500 ETF (SPY) with the track of the S&P 500 Index
  • NASDAQ 100 Index in ETF. NASDAQ is mainly composed of tech stocks. 

There are many more “big names” that we suggest you study before investing.

Conclusion

An ETF can be an easy way to start investing for beginners or those who are scared of mutual funds. Once you start, check the dividend returns of the fund. 

Interesting fact- the Daily Technology Bull 3x (TECL) was up by 1452% even during the current economic crisis. If someone invests only $10,000 in it, they could gain almost $150,000. You can check more interesting facts about ETFs here.

The previous example just proves that ETFs are safe and a low-risk way to enhance your personal investments.

Подробнее

Tags: ,

Small Investments to Make Money 26.06.2020

Before investors enter the market, the first question that comes to their minds is how much money they need to start. It might come as a surprise to you that it’s not necessary to be wealthy. But what if you don’t know how to do small investments? If you’re in that boat, keep on reading. There are plenty of ways to make money, even if you only have $50 to spare.

Robo-Advisors

Robots have been gaining popularity among investors due to their ability to make the investing process as simple as possible. Also, they don’t require in-depth knowledge and persuasive skills. The Robo-investing process starts with a short questionnaire that helps define your goals and risk tolerance. 

Robo-advisor’s decisions are based on algorithms that exclude emotions. Every investor knows that emotions are one’s biggest enemy while trading. Robots choose a diversified portfolio of low-cost assets. Although you should be prepared for the fact that robots apply fees, the chance to gain profit is high.

Small Investment Mutual Funds

Mutual funds allow you to create a highly diversified portfolio of assets and invest in all of them with just one transaction. The funds differ with the minimum size of the deposit. Although there are those whose minimum requirement can reach $10,000, there are also accounts with monthly investments of just $50. 

A significant advantage of a mutual fund is that your money is invested by experts who know everything about the market and have years of investment practice. 

According to Morningstar, the cost of funds has decreased significantly over the past 20 years. Thus, in 2019, investors’ expenses amounted to 0.45% versus 0.87% in 1999. 

Think About Retirement In Advance

One excellent option is to invest in an employer-sponsored retirement plan. You can choose to set aside a small amount of money that you likely wouldn’t even notice. For example, you can set up 1% of your salary to be withheld for investments. Another thing that can decrease your spending is the tax deduction. 

If you are not satisfied with the return, you can raise the percentage of your salary that is withheld for investments. And what’s more, as your salary increases over time, the increased withholding percentage won’t make a noticeable impact on your take-home pay. 

Real Estate 

Real Estate

There is a bias that real estate is one of the most expensive types of investing. And this was true at one point, but real estate crowdfunding has changed the market and made it more accessible. This option enables you to own shares of commercial real estate. Although you won’t be able to invest having only $50, holding $500 will open a new opportunity for you. 

The main benefit of real estate crowdfunding is the ability to share risks with other investors and the lack of responsibility for your property’s maintenance. Moreover, you are not required to pay enormous charges that are typically associated with property investments. 

Trading

Trading and investing are different approaches. Nevertheless, they have the same result – rewards. Usually, investing is considered to be more expensive than trading. So, if you don’t have lots of money, you can open a trading account. 

There is a wide range of securities you can trade. Choose from currencies, commodities, and stocks. To start trading, you need at least $10. A broker will provide you with leverage that will help you make more substantial deposits. The main pro is the opportunity to earn money quickly. Keep in mind, though: trading is not often used for long-term goals. 

Small Investment Options

Small investment options are one of the easiest ways to make money. You don’t need comprehensive knowledge of markets, previous experience, or in-depth market analysis. 

The idea of such options is to earn returns according to a “yes/no” scheme. All you need to do is to predict whether the market will reach the predetermined condition. Also, it doesn’t require your time, since orders expire automatically. The minimum deposit doesn’t exceed $100.   

Savings Accounts

Savings accounts are not the best option to gain huge returns. However, it’s an excellent opportunity to accumulate your funds and get small investment passive income with zero risks. When opening a savings account, you allow a bank to use your money for the interest it pays you monthly. The minimum amount you can start with is low and usually varies from $500 to $1,000. 

Peer-to-Peer Lending

In this investing method, you are still a lender who gives loans to borrowers. When using this option, you lend money to companies or individuals and gather the interest on the return. Peer-to-peer lending is more profitable than savings accounts. Risks are still low as platform algorithms limit them. 

To participate in peer-to-peer lending, you need to find a broker. Before accepting an offer, you are able to consider a range of in-depth data. Also, your risk will be evaluated based on an algorithm. 

US Treasury Debt

Any investment comes with inherent risks. However, you can reduce the risk factor by investing in the right assets. US Treasury Securities are the notes that are issued by the US Treasury Department to support the national debt. The length of them varies from 1 month to 30 years. 

To help fund the US’ debt, it’s enough to visit the Treasury Direct, which a portal of the US Treasury Department. You can also purchase Treasury Inflation-Protected Securities. $100 will be enough to start. 

Conclusion

To conclude, although it’s a common conception that only affluent people can invest, this is not true. There is a vast list of investing methods, even if you have limited funds. They differ with the level of risk, the minimum deposit, and the speed of returns. An outstanding advantage is that you can make small investments online.

One of the methods of small investments is mutual funds. Such funds enable you to hedge your risks by investing in several assets and relying on professionals that make decisions for you. Einvestment is a mutual fund whose professionals are eager to help you get rewards for small deposits.

Подробнее

Tags: ,