How to invest in January 2020
In this article we offer some valuations for those who want to invest in January 2020. Each historical period has its own peculiarities in terms of investment, whether they are “epochal” historical periods or historical periods characterized by routine discussions. As important as it may seem, the current political situation at Italian and European level does not come to much worse periods such as the spread at 600 which led to the fall of the last Berlusconi government, nor to the crisis of 2008-2009 whose consequences lasted for years, nor to 2001 of the Twin Towers. In the meantime, there have also been conflicts of a certain importance and other very important events that have caused “trembling” and not only the markets.
All this introduction, therefore, simply serves to make it clear that, however harsh the current shocks between Rome and Brussels may be, we are certainly not in a period comparable to other historical moments that have weighed more on the economy.
The fact is, however, that the budget law as proposed by the M5S-Lega government not only dislikes Brussels and many economists, but also dislikes a number of big businessmen, who have frozen budgets for possible new investments because of the uncertain situation.
It must be considered, in fact, that the big investors did not become such because they made “bets”, but because most of them understood when it was the right time to invest and when not. So, this is not a case or a political choice, but simply a rational choice. “Is there stability? I invest. Is there no stability? I don’t invest or invest in other countries.”
When it comes to investment, “faith” in the tricolor flag most of the time carries no weight. Those who invest usually look after their own interests and/or those of the company.
Obviously this is true for individual investors, the shareholders, while when it comes to the management and investment of companies with a historic brand, see Pernigotti, the issue is a bit different. In those cases, human, social and cultural elements should be taken into account, as well as an assessment by the central government of the importance of a particular brand in the preservation of Made in Italy. Sometimes the Made in Italy character is relative, sometimes not. In any case, it is always necessary to start thinking before and not only after a problem arises on the budget or on the cards of those who buy a brand.
These, however, are political choices that we cannot and do not want to get caught up in. What is important to us is that our readers can have clearer ideas about how and what to invest if they decide to invest.
In this regard, it should be pointed out or rather remembered, if necessary, that with online CFD trading you can trade both upwards and downwards, so if you are determined to take advantage of your economic forecasts, you could still open positions downwards on the instruments for which you believe there will be a worsening.
The markets in which you can invest both upwards and downwards are:
- Currencies (foreign exchange)
- Raw materials (metals, energy, food)
Forex January 2020, How To Invest Or Trade
As for the most important currency cross, that is to say Euro Dollar, the issue has become very interesting, also because of Italy. In fact, taking up the speech mentioned above regarding the Budget Law that should come into force in 2019, the government has cashed in the rejection of the European summits, including the European Commission.
To that of the technicians, it has also been added the rejection (among other things more convinced) by some of the countries of the European Union, including Austria. If on the one hand they seem to be “brothers of nationalism/sovranism” with Vice Premier Salvini, on the other hand their concept of “independence” would not allow tears to the rule, as the Italian government requires on this occasion.
Although we have already seen tears in the rule in the past, the current situation creates discontent and instability.
Without taking too long, the concept is this: if the instability remains, the EUR USD exchange rate will only fall. The euro, in fact, if the “crisis” persists, will only lose value against the dollar, in the “direct challenge” inherent in the EURUSD exchange rate.
So, for those who want to invest in January 2020 or trade the Euro Dollar is definitely one of the main tools to take into account, as it could see important downward movements already from this second half of November.
In this respect, the dates to be taken into account most for euro-dollar trading will certainly be those for which the next responses from Brussels are actually expected. Answers, it is good to stress, which are made up of both committees and Member States.
The worst possible situation for the euro-dollar would be that an acceptance of the Italian manoeuvre entails sanctions (interests) or important reactions from other member countries. All this in view of the next European elections in March.
To trade on Forex we recommend to evaluate the platforms of 24option and Markets.
Index trading in January 2020
Remaining in the European context, stock market indices should certainly also be taken into account in this context. First of all, the FTSE MIB index of Borsa Italiana, because for Piazza Affari will certainly start a hot and frantic period, in case there are tears with the European Union.
The main index of FTSE MIB, driven a lot by the banking institutions that could (if there was) pay the price of a rise in the spread, could move down sharply.
For those who remain optimistic, the same is true on the contrary, with a bullish view. In such a case, those who foresee a final agreement between the EU and Italy or a “good face to bad play”, could open Long positions on the FTSE MIB or Italia 40 index, depending on how it is named on the CFD trading platform on which you trade.
Which stocks to buy or sell in January 2020
While if you trade with CFDs you can “sell” even without having bought, thanks to the “short” (bearish) positions, let’s see what stocks you might consider if you decide to invest in January 2020.
When trading equities you should take into account what has been said about indices for the banking sector. In fact, the situation of uncertainty (not to be confused, however, with the worst “situation of instability”) creates discomfort in the banking securities market.
In fact, the possible increase in the spread would mainly involve the banking market.
The simplest of the reasons lies in the fact that banking and insurance institutions are the first holders of government bonds, ergo if they depreciate, there is a loss of value for banks and insurance companies. The loss of value of BTPs (Polynesian Treasury Bonds) therefore represents a loss for banks and credit institutions.
In addition to all this, there is the judgement of reliability in the eyes of foreign investors (and not only!), who see Italy as not exactly an ideal scenario in which to invest. There is no shortage of investment opportunities in the world, so waiting for better times (with lower spreads) is an option easily feasible (as well as understandable).
The investment by foreign investors not only goes to replenish the balance sheets of companies, but of the State itself. Indeed, Italy owes a lot to the purchase of BTPs by foreign investors. If the return increases, the premium increases, but the risks on the part of the issuing country and its economic instability also increase.
That said, the securities to take into strong consideration to invest in January 2020 or for online stock trading (upward or downward), are those of banks.
Cryptocurrency January 2020
Last year, these days, we all saw the Bitcoin traveling to $20,000, with all the news on TV and radio reporting statements from major authorities about it. The Internet was definitely “kidnapped” by the cryptocurrency and Bitcoin that actually took all the cryptomonete with it.
Well, a year later, Bitcoin is just over 5 thousand dollars, there is not much talk about cryptocurrency and this is both a positive and negative fact.
Let’s start from the negative: we no longer address the issue of payment through digital currencies, which will most likely be resumed in the future.
The positive aspects:
- There are no longer any major daily price upheavals due to extraordinary trading volumes (at least, not comparable to those seen previously).
- the cryptocurrency phenomenon launched the blockchain technology boom
- Ethereum was the project that cleared the smart contracts
- From these points could start important considerations about the evaluation (evaluating does not mean buying or opening positions but judging personally) about trading or investing in blockchain and listed companies.
Trading on Blend in January 2020
Another financial instrument to be evaluated for negotiation in January 2020 are blends. These are a novelty available on the Markets trading platform and represent groupings of shares based on various parameters including market capitalization, liquidity, price volatility and trading volume of individual shares.
In this way, you can make a very precise selection of the type of shares to invest in January 2020, a very useful possibility for those who decide to do so based on the sector to which the stock belongs.
As we explained in our article on blends, these present a rather complex process of creation, based on three elements:
- daily and annual volatility;
- percentage of capitalization of each Blend share compared to the total market capitalization of all Blend shares;
- blend title correlation matrix.
Some of the most interesting blends to negotiate on are:
- E-commerce: which includes Amazon, Alibaba, eBay, Best Buy and Etsy.
- Social Media: which includes: Facebook, Snapchat, Twitter, Weibo and Yelp.
- US Tech: including: Apple, Google, IBM, Intel and Microsoft.
If last year you focused on trying to understand the dynamics of cryptocurrency prices, this year you could use the same energy and the same time to evaluate blends, which as we have seen are made up of stocks, listed on stock exchanges and therefore part of the traditional and more solid economic system.