Contrary to popular belief, all is not lost when it comes to 2021 and the coming years. This is particularly true when it comes to investing in high-performing and promising companies. While the impact of 2020 and the unprecedented global conditions that arose cannot be denied, those looking to explore investment opportunities, such as share trading, are still encouraged to do so, but cautiously. Share trading refers to the buying and selling of company shares, in the hopes of making a profit. Alternatively, it could also be the trading of derivative products based on company stock. It is worth noting, however, that pursuing share trading currently may be particularly beneficial for those with a long-term goal or vision. Experts project that such investments may not be immediately profitable and lucrative, as the economy is still reeling from 2020 and will most likely continue to do so for months, and possibly even years to come, despite some favourable and potentially lucrative conditions that have since arisen for some companies.
When one looks at companies and investments made on the FTSE 100, for example, it is widely evident and reported that some sectors are performing better than others post-2020. Tech companies continue to be the go-to for investors currently, while travel and accommodation companies continue to see a dip in share value and profits. On the upside, the FTSE 100 has reportedly been reaching new highs. Promising and enticing as that may be, some industry insiders warn that a rapid rise in stocks poses a threat of equally rapid drops.
There are several ways to get started with trading, as there is a wide variety of financial products to consider investing in while pursuing major gains. These include, but are not limited to, gold, real estate and the stock market. Given the current conditions and the rising interest in day trading, independent financial expert, Claire Walsh was quoted as saying, “Research has routinely shown that time in the market is more successful than timing the market, so I would caution investors against trying to pre-empt any potential falls.”
Generally speaking, the steps to follow when you are ready to start share trading entail the following:
- Open a trading account
Naturally, given the sensitivity of such as matter, it is advised to open a trading account through a credible and reputable online stock broker. Fortunately, because of the growing interest in share trading and the tech industry as a whole, traders are spoilt for choice and have multiple credible brokers to choose from.
- Expand your industry knowledge
This can be done through the resources available on your chosen trading platform or the internet as a whole, including short courses and workshops. Most reputable trading platforms try to equip traders with the right tools and information to succeed in the industry. This is inclusive of the fundamentals of share trading for novice traders, industry overview and insights, which may include historic data, the latest industry news and developments, and updates on the various entities of interests’ management or leadership changes, as this undoubtedly does have an impact of the share value of the business.
For example, if a company that you invested in suddenly announces the appointment of someone who is facing corruption, fraud and money laundering allegations, this would impact investor confidence and the general perception of the company and its value. In turn, the share value would likely decrease and ultimately have an effect on your personal investment and reduce your profit-making opportunities in the long run.
- Familiarise yourself with the analytical tools and improve on your market analysis skills
This can be achieved through practicing and improving on your trading skills via demo accounts that give you an idea of what real-time trading is like. These are widely available and offered by credible trading platforms.
- Continue to hone your skills
As with anything, practice makes perfect. Some of the best and most experienced traders have reached that level because of consistent efforts and the fact that some of them continue to consult with and learn from industry insiders, experts, and those with a wealth of knowledge. Chances are, there are areas of improvement that everybody has.
That being said, for those looking to get started with share trading in 2021 particularly, some of the best stocks to invest in right now are reportedly Genuit, Man United FC, Rolls Royce, Fastly and, surprisingly, Blackberry. While Blackberry became a market leader in the early to mid-2000s because of its smartphones, that is no longer the case. Nowadays, the company focuses on cybersecurity software, which is proving to be quite lucrative.