More than 50% of US adults invested in the stock market in 2017, in part because of technological revolutions. Because of the ease and availability of mobile trading apps, the new generations of adults are choosing to invest in stocks and bonds while others see value in commodities like gold and virtual currencies such as Bitcoin. But this popularity doesn’t mean investing is easy. There are two types of investors: those who are more active and those who take passive roles, stepping away from their portfolio for days or weeks. Either way, these investors need to know how to keep track of the market for when they’re ready.
Read Financial News
Reading financial news is one of the best ways to stay on top of market movements. Financial news outlets can give you insight into which stocks to buy, sell, or hold, but they can also provide a general narrative of the market, which will help increase your overall knowledge of investing. If you’re investing in the US stock market, media outlets like CNBC, CNN Money, and Yahoo Finance cover most publicly traded companies. Bloomberg is also a helpful outlet that covers various markets, such as the London Stock Exchange. Additionally, the Financial Times is an especially great platform for retail traders and offers a range of portfolio analysis tools.
Compare and Contrast
Good investors need to be able to formulate opinions on which investments are best for their portfolios. These opinions come from comparing and contrasting different market assets, such as Bitcoin vs Ethereum. It’s also important to compare how different currencies compare against each other. For example, the DXY index looks at the strength of the US dollar against other currencies, such as the Euro, Canadian dollar, Pound sterling, and Japanese yen. By looking at the DXY chart, investors can see if the US dollar is increasing, giving it more value than other major currencies. Considering the value of the US dollar is crucial because it informs investors and the public about how the dollar will impact the economy, such as consumer prices and import and export demands.
Conduct SWOT Analysis
While reading financial news and studying charts is important, investors must also put a bit of themselves in their investment portfolios. In other words, find the industries you are most passionate about investing in. Don’t invest in commodities like gold just because an article told you to. If you’re more interested in becoming a retail investor, explore that. Once you know the industry you’re interested in, pick a few companies that stand out and conduct a SWOT analysis to compare them. A SWOT analysis is a business tool that compares the strengths and weaknesses of a company with industry opportunities and threats. Conducting a SWOT analysis is helpful if you want to know if the company you’re looking at is outperforming or underperforming against its competitors.
What Does The Future Hold?
Even though there are optimistic projections about where the stock market is going, such as global ESG assets projected to reach $53 trillion by 2025, it’s important to remember that the market is still volatile. It can change daily due to both macro and micro factors, such as inflation and a company’s earnings report. Because of this, both beginner and expert investors need to have methods for keeping track of the market and which companies are dominating the space, such as by reading financial news, comparing currencies, and conducting SWOT analysis.