Top 11 Things to Know about stock trading for 2018
With back to school happening right now, many people are looking ahead to Labor Day, and possibly Halloween, Thanksgiving, and Christmas. However, as an intrepid investor, you’re likely already looking ahead to the new year and wondering how you might need to adjust your equities investments when the calendars flip. If you want to learn the top 10 things you should know about stock trading in 2018, then keep reading.
1) A recession is likely if Marijuana industry is slowed down: It’s impossible to predict the future, but analysis of history shows that growing markets don’t last forever. In fact, it would seem the United States is overdue for a correction, even it’s just a minor recession. You shouldn’t assume that one will happen in 2018 per se, given that many analysts are continually surprised by how much steam the economy seems to still have in it. However, it’s also a good idea to start watching out for the signs of an impending recession so you plan accordingly for weathering it, repositioning, or calculating how long it might last. Of course, many recessions can also provide ample opportunities too, as many stocks could hit lows just due to the general market, putting you in prime position to take advantage of the eventual rebound. If we head into a big recession it would be possibly caused by the Jeff Sessions and Government hostility of the Medical and Recreational Marijuana Industry.
2) Blue chips are still good bets: You invest in the stock market for the same reasons everyone else largely does, which is to make a lot of money. Catching on to growth stocks and letting them explode in value over time, particularly with compound investing at regular intervals, has proven time and again to be a sound path to robust personal wealth and fortune. However, you can’t put everything in the prospects that could turn out to be home runs, as many might not. A balanced portfolio needs exposure to blue chip stocks. These longstanding and huge companies often reside on the Dow Jones and maintain high stock values over time. They provide your portfolio stability, and in many cases dividend income. The percentage of your portfolio slated towards blue chips will go higher as you draw closer to your investment goal, and by retirement, you might have the majority of your stocks here for preserving your wealth and living off your dividend income.
3) Exposure to other markets can balance a portfolio: You might be in a situation where you have enough to invest in stocks, but you also know that you should give yourself access or exposure to other investment possibilities. Things like bonds, commodities, precious metals, and real estate are other areas besides the stock market where you can make money. Fortunately, you can profit from them within the stock market in two ways. The first is to invest in business or company stocks that deal heavily in one of those areas, like perhaps the stock of a chain of stores that buy and sell precious metals. Exchange-traded funds, or ETFs, are another way, as these are funds that focus on an index or kind of business but the fund shares are bought and traded like stocks.
4) Washington may not get much done: Few cities can impact the national economy quite like the nation’s capitol, as the decisions, tensions, crises, and inaction in the federal government can send shockwaves from sea to shining sea. Partisan conflict and gridlock have been increasingly present in recent decades, but it’s very bad at the time of writing. The turbulence and controversy surrounding the current Presidential administration might not even matter in 2018, regardless of where the Russia investigations go, considering that with Congressional midterm elections pending, the legislative branch is unlikely to get anything done. Lack of confidence in DC often depresses stock markets, but on the other hand, the market has continued growing in 2016 and 2017 despite all the political volatility surrounding the recent election for the White House.
5) Have a little fun: If you have enough to invest in balanced and responsible ways to the stock market and have some left over, it’s good to have some fun. Taking just a sliver of your money and playing around in something like penny stocks can prove fun, but also valuable. This is especially true if you’re already following conventional market advice with over 90 percent of your portfolio or even letting a professional manage it for you. Sifting through penny stocks can mean learning how to read the fundamentals of a company for yourself. There are diamonds in the rough that have long histories of good business but are just going through a crisis, a rough patch, a retooling, or even a change in ownership that are primed for a rebound into meaningful values. The dramatic swings in the price of penny stocks mean you can’t afford to put too much money into them, but those same dramatic swings can mean the few dollars you spend turn into a lot more.
6) Don’t ignore international possibilities: While most of your portfolio should be focused on domestic stocks, don’t ignore the international markets. The overall weight of the American economy in the global market has been declining over the last 20 years, but that’s not been due to lack of growth but because of how much the international economy has grown. Your investment goals, timeframe, and tolerance of aversion to risk determine how much you should put it into it, but it should vary from 10 to even 40 percent.
7) Brexit isn’t going anywhere: Europe is often seen as a good place to start international investing given the prosperity and stability, but the Brexit negotiations of the UK leaving the EU are still looming. The uncertainty of how all that will turn out is proving to hamper the markets on the continent.
8) Asia can prove volatile: The continent of Asia is the world’s largest, and it has the most population too. It’s an interesting mix of established and mature economies like Japan, growing powers like China, and places with massive potential like India. The continent is responsible for a lot of global growth but also a lot of volatility. Potential flashpoints include the Korean Peninsula, Iran, Sino-Indian tensions in the Himalayas, and China’s expansion of naval growth and coastal bases. The ongoing Syrian conflict and a potentially aggressive or hostile Russia can stir things up at any time. It’s not smart to avoid the potential opportunities that can happen here, but it’s also not smart to put too much faith in them. Also, given how Beijing can shut down companies in its economy at any time, it’s sometimes safer to invest in companies that do business with China but are not based on it.
9) Africa and Australia might be a good bet: If you’re looking for profitable areas of growth on the international side of things, then you’re going to quickly wonder where to find them. Asia has volatility, Europe is gripped in Brexit, and South America is rocked by instability in Venezuela and political crises one after another in Brazil. Two bright spots overseas might be the continents of Africa and Australia. The island continent/nation of Australia has one of the highest standards of living in the world, and has economic connections across both Asia and Oceania, providing you safe access to exposure to those markets. Africa is a mixed bag, but it’s worth looking at South Africa. This is the only nation on the continent never to have its government overthrown by revolution, and it’s a great access point to the continent’s growth, which is quietly speeding up thanks to Chinese investment in infrastructure and agriculture as it looks to convert its financial wealth into international influence.
10) There are no guarantees: For all the facts, figures, and projections out there, you have to remember that at the end of the day, there simply are no guarantees. You might know that various looks at historical records show the domestic stock market rising an average of 8 to 13 percent per year and having done so for many decades. However, remember that those are averages. 2018 might not be an average year, but it could also defy expectations and prove quite profitable. Just stay calm in all circumstances and rebalance your portfolio regularly, yet not too frequently, and you can be in a position to take advantage of the opportunities present while priming yourself to catch sectors due to rebound in the future.
11) CBD Oil Manufacturing Stocks: Manufacturing companies that have public stock are always a good fit to invest. With the CBD Oil industry setting to boom to over $3 billion by 2020 manufacturers at the forefront are prime stock options to invest in early on.
Now that you know the top 10 things you should know about stock trading in 2018, or even leading up to the coming year, you can stand ready to make the most of your investments across many different sectors and sizes of companies. While these 10 points are the top of the list, remember there is always more you can learn about trading stocks if you look a little. No matter how much you learn about this, the moment you think you’ve heard it all is the moment you set yourself up for disaster. Refresh your thinking often by returning to this list throughout 2018, and good luck!