2020 has been very unpredictable so far. In many ways, it almost feels like another 2008-style financial crisis is slowly getting built up.
Covid19 has put many cities in complete lockdown, while global debt keeps building up. Many don’t see it yet, but investing is going to be a tough cookie to crack in 2020.
In the last few weeks, we have already seen the devastating effects of these issues come to fruition.
The SP500 has seen a dramatic drop to unprecedented lows..
Meanwhile, the VIX index, which shows the volatility and fear in the market, has not been this high since the latest financial crisis.
All this information was also picked up and presented to the world by the biggest TV channels worldwide:
So, where are we going from here? Where can you invest your money in a market that “screams” selling condition and cash holding?
Let’s take a look at the best options, and explain what makes them better than cash hoarding.
While most investment opportunities seem bleak when it comes to their returns in 2020, gold still seems to be holding strong. As the precious metal is not state-backed, it functions as a “safe haven” for those looking to protect their value during uncertain economic situations.
While gold is certainly not a way to “make money fast” it does work as one of the best ways to preserve wealth. If the current uncertainty ends up turning into a real financial crisis, we may very well see a spike in its price, and possibly new highs.
While it’s safe to say that gold could perform better than other investments in the short term, don’t put all your eggs in one basket. Diversification is always a better strategy to follow. If you recently cashed out other investments, consider putting just a part of it in gold, and explore other opportunities as well.
Bitcoin has behaved pretty interesting this year. Since it’s lows in December 2018, the cryptocurrency has remained in a positive uptrend following historical patterns of the previous bull market.
In recent weeks, Bitcoin has also seen a significant price drop of approximately 20%. Yet, Bitcoin investors don’t seem to be bothered. After all, this drop goes in line with the pre-halving pullback which the cryptocurrency experiences to “shake out” the weak investors.
Truth is, Bitcoin may be the best investment for 2020, and here is why:
- One after another, countries that used to impose a banking ban on Bitcoin are now legalizing it. Just in the past few weeks, India and South Korea made Bitcoin accessible to all their citizens, allowing them to invest in crypto using their bank account.
- In less than 60 days, Bitcoin will experience its 3rd halving, increasing the mining difficulty. Looking at historical patterns, this event has been known to increase the price of Bitcoin in the year after.
These events, coupled with the increasing popularity of cryptocurrency, could surge BTC’s price amidst financial chaos.
Then again, if you want to play your cards safe, you can utilize the opportunity of a financial crisis to invest in real estate.
When looking at previous economic downturns, the value of real estate dropped significantly. Those that benefited most were the ones that used this opportunity to get in cheap, and sell at a significant profit when the economy showed signs of recovery.
That being said, real estate does require a significant capital investment. As such, it is not meant for everyone and usually reserved for those that have a significant amount of cash-at-hand.
If you really want to make use of this opportunity but are still a little short on cash, you may utilise the power of banks in your benefit. To learn more about such investment strategies, start by reading The Millionaire Next Door and Building Wealth One House at a Time.
Investing is a risky game no matter how you play your cards. 2020 may be the start of a devastating financial crisis that will generate a lot of fear, as well as opportunities.
Learn to see these opportunities by looking at the aftermath of the latest crisis the world went through. Chances are that there will be many similarities this time around.
And as always, none of the information presented above is financial advice. We advise you to think about the points discussed and do more research. This will help you come to your own conclusions.