Although 2020 has been extremely difficult for investors, it might yet get even more challenging to get a return on money in the next couple of years.
The impact of the coronavirus has been vast and it is very hard to predict what is going to happen next, with a second wave of the pandemic spreading across large areas of the planet.
With more than 200,000 Americans having already died of COVID-19, the human impact of the crisis cannot be understated. But the knock-on effect on the global economy will also be vast.
Finding a safe investment could be virtually impossible until the pandemic is over and economies start to rebuild from a catastrophic period.
But don’t take our word for it. Heidi Allen, who runs the popular NoDepositDaily site, pointed us to their comprehensive guide that all money minded people should read.
For those who are still willing to to invest this year, here are two of the most appealing options:
Gold
Long considered the safest investment possible anywhere on the planet, gold continues to be very popular and there was a rush to invest in the commodity earlier on in the year.
With stocks widely assumed to be overpriced right now and with the dollar also potentially being set for a crash, gold may be the best place for people to put their money at the moment.
Between the start of the year and early August, the price of gold shot up by more than 30%, giving investors who were already on board a rich return. Gold’s value topped $2,000 an ounce with investors using it as a hedge against a stock market that has been more unpredictable than ever as a result of the pandemic’s impact across the world.
But since then there has been a small decline in gold’s price, leading some to speculate it is not quite as safe an investment as it seems to be on the surface. Others are predicting that a bad second wave of the virus could lead investors to flock back to gold once more, pushing the price back up again towards that $2,000 mark.
Whatever happens — including with the result of the US election — gold will continue to be treated as a low-risk investment. With so much uncertainty surrounding economies right now, gold’s popularity with investors seems certain to remain high.
The rise in gold’s price over the course of the year now stands at around the 20% mark, though investors must assume its value will be more volatile than normal moving forward.
Tech stocks
While shares may feel unsafe, tech stocks have mostly been rising fast during 2020 so far.
At a time when value investing is producing a return lower than at any point in two centuries, those who have invested in tech stocks throughout the crisis are likely to be sitting pretty.
October was an especially big month for tech stocks as some of the world’s largest companies issued financial updates that were broadly as positive as could be expected in this situation.
Shares in Facebook are up by more than a third compared to the start of the year, while the stock price of Apple is up by more than half in the last nine months.
Even those rises cannot compete with the stunning growth enjoyed by Amazon stocks, which are up by around 75% on the start of 2020.
With online shopping having exploded as a result of the pandemic keeping people in their homes, Amazon’s share price has been growing at a rapid rate over the last few months.
Indeed, Amazon was able to announce record sales in the third quarter — sales hit $96 billion for a $6 billion profit — and a second wave should be good for its stocks in the coming months.
While tech stocks are expensive, this is for a good reason. Shares in giants of the industry such as Amazon, Apple and Facebook are as close to a safe bet as it is possible to find right now.
With a limited sell-off in tech stocks like Twitter, Tesla, Facebook, Apple and Amazon saw a small fall at the end of last month, this could mean it is possible for investors to buy low.
Gold and tech stocks are certainly recommended as some of the best bets at the moment.
Photo Credit: stock photo
Question of the Week