The past two years have been a wild ride for anyone with money in the equities and capital markets. Those who regularly hold assets like corporate stocks, commodities, oil, precious metals, foreign currency, cryptocurrency, futures, ETFs (exchange traded funds), index funds, and others in their portfolios are still wondering what happened. Before the pandemic, in March 2020, there was already plenty of volatility in the economy.
But after the early months of that year, it seemed as if everything went haywire. The entire crypto sector whipsawed in every direction multiple times. Commodities, particularly oil and natural gas, surged after the Ukraine-Russia war began. Corporate stocks took a major dive and are still recovering. Virtually every other asset class has had its ups and downs to the extreme.
What’s the best course of action for investors who sat it out or survived until now? As 2023 is set to get underway, there are some exceptionally attractive ways for individuals to get involved. All that’s needed is to set up an online brokerage account, learn the basics, and get into the action. With the availability of CFDs (contracts for difference), those with any amount of capital can play the market by going short or long based on how they think prices will move. With the convenience of digital trading, you can choose an app for stock trading and manage this all from your smartphone.
In short, it’s an open game for investors who are willing to do some research, choose an asset class, and start trading. Perhaps the most intelligent way to begin is by reviewing the overall state of the markets, finding out how to get involved, gathering some solid information about CFDs, and moving forward as an active participant in one of the most exciting financial market scenarios of the past 50 years. Here are the pertinent points that every prospective trader should think about.
Corporate Stock Market Overview
While all the international indices tend to move in unique patterns over long periods of time, it’s safe to say that there has been a general trend since late 2021, when nearly all the index exchanges, like the S&P 500, the German DAX, and the British FTSE, peaked. Since then, the global equities markets have been slowly drifting downward, some more rapidly than others. What’s the next leg of the big picture for shares? After slight upward bumps in July and October, the overall trend is for a long-term downward movement. Investors who are positioned to go short or take short positions with CFDs could find a number of solid opportunities to ride the slide as corporate equities perform poorly for the rest of 2023 and well into 2023.
How to Get Involved
What’s the most convenient and safe way to get involved in the world of trading, investing, buying, and selling? Consider that at top online brokers like AvaTrade, account holders can use all sorts of techniques and work with many different kinds of assets. These days, with the widespread availability of online platforms for individual investors and traders, anyone can get involved in day-to-day action. Whether you prefer to follow the forex or cryptocurrency markets or trade CFDs on major assets like corporate stocks, government bonds, ETFs, index funds, precious metals, energy, and agricultural commodities, the only limitation is your personal preference. Most new traders tackle just one or two assets before expanding their horizons and including more areas within their scope of operations.
Using CFDs for Strategic Advantage
Contracts for difference are unique instruments that let investors take long or short positions on virtually any capital or equity purchase. Brokers earn their take on the small buy-sell spread on the contracts, while investors act as speculators who predict which direction the price of the asset will go, up or down. When you make an accurate prediction, your CFD is profitable. Huge numbers of traders and investing enthusiasts prefer CFDs because there’s no obligation to own the underlying asset and because they can risk as much or as little capital as they wish.
Oil & Precious Metals
Crude oil prices surged from the early part of 2020 until several months after the Ukraine-Russia war began. However, as 2023 played out, it appears that several political events have been bringing oil back down toward the $80 per barrel mark, with a possible continuation to the $60 mark by early 2023. The leading precious metal, gold, has not responded to the sagging economy as many had expected it to. However, gold enthusiasts might see this as a classic case of a delayed reaction and that the yellow metal is set to surge. Others believe that a rebounding economy in mid-2023 could dampen the price of all precious metals.
The Current Economic Conditions
The market is continuing to trend downward as investors become more cautious. Many are fearfully watching the political landscape and the potential for a financial crisis in Europe. There was some good news overnight as job growth increased by 260,000 positions in October. This should help to bolster consumer spending which has been weak recently. However, overall conditions remain weak and there is still a lot of uncertainty out there. One factor that could have a big impact on the economy is whether or not Congress can come to an agreement on the budget. If they can’t, then we could see another round of large-scale government cuts which would further damage the economy.
Looking ahead to the next year, we believe that there are several important market dynamics that will come into play. We’ll be discussing these in more detail in our upcoming articles. In the meantime, we hope you found this article helpful and that it gave you a preview of what to expect from us in the near future. Thank you for reading and leave a comment down below of what you think will happen with the market next year.