The Year 2021 sets new hope for the world economy after the destructive period of 2020 caused by COVID-19. The finances of many have been seriously hit through their investments during the turbulent year of 2020. Many more have become doubtful or conservative towards investing. But, is it better to cut our losses and withdraw from our previous investment plans? Well, not necessarily!
Investing can help you manage your money more wisely, and with the right portfolio, you are certain to gain benefits in the long run! Below are five reasons why you should continue investing in 2021. Check these out before taking any investment-related actions!
The market is expected to recover as COVID-19 vaccines become widely available. After a whole year of battling the COVID-19, we are finally seeing some positive results. Through the joint efforts of medical professionals and scientists worldwide, we can now hope to draw an end to the global pandemic. The world economy is gradually returning back on track and stabilizing. Throughout history, such significant economic ups and downs as the one we are currently experiencing have benefited those investors who did not shy away from continuing investing. Turbulent times always offer greater returns to those wishing to take the risk. When you have investment opportunities like these laying right in front of you, the best course of action is to reap the benefits. This does not, of course, mean that you should invest in just anything. Do your research thoroughly and invest in projects and assets that appeal to you, those most likely to see the highest rebound rates and the lowest possibility of default.
To boost the markets to recover faster, governments across the globe have adjusted their economic policies. These, among others, include amended policies on investments, such as lowering investment requirements for individual investors and increasing liquidity for investment plans. Other policies are aimed at supporting businesses, especially those operating in the hardest-hit sectors.
These support mechanisms should provide an additional safety guarantee and peace of mind for investors that may otherwise shy away from investing throughout these turbulent times.
Bloom in Crowdfunding
Technological advances in the previous decade have ensured that individual investors now enjoy access to a wide range of investment options at very low entry points. One of such investment options is provided by crowdfunding. According to the statistics, the crowdfunding market is expected to grow by an estimated USD 196.36 billion during 2021-2025. The COVID-19 pandemic has not impacted the crowdfunding sector as much as other sectors, and it enjoys investor confidence that is higher than even before the pandemic. The main reason behind this boost for the crowdfunding industry is probably the fact that many people were confined to their homes during the pandemic and searched for alternative ways to increase their earnings.
Crowdfunding provides additional income possibilities for individuals and also boosts the economy by providing easier access to financing for small businesses.
In 2020 trade tensions in various parts of the world were widely felt. This added extra pressure on the global stage in terms of investment volatility. With the Brexit situation finally drawing to a close and the US election behind us, it is expected that investors will now enjoy a more predictable period.
Although predictability may not mean high returns (lower risk is usually rewarded by lower returns), this period is suitable for those just starting on their investment journeys. It will allow learning in a safer environment and prepare the new investors better for weathering any future storms.
Personal Finance Growth
Investing is about profiting and making your money earn more money. A good investment portfolio should make your savings grow and give you additional motivation to always look out for smart investment possibilities.
While there are multiple tools for investing, such as stocks, bonds and properties, different investors have different risk tolerances; thus, each makes their investment decisions accordingly.
For new investors or individuals with a low-risk tolerance, crowdfunding is a good choice because it requires little knowledge of investing and has low entry points, allowing investors to learn by risking relatively smaller sums of money.
Pretty much nobody can predict the next sudden turbulence in the global market, but investing is never a bad idea as long as you are wise in your investment strategies!