alternative investments

Here’s What To Expect From Cryptocurrency in 2020

January 10, 2020 By Tamila McDonald Leave a Comment

The cryptocurrency market is largely about speculation. It is dramatically impacted by what investors (both current and potential) think will happen in the market. As a result, cryptocurrencies have had some incredible highs and shocking lows over recent years. The volatility makes it hard to figure out what you can expect from the market in 2020. However, by understanding various trends and upcoming events, you might be able to predict a bit of what the future will hold. If you’re wondering what you can expect from cryptocurrency in 2020, here’s what you need to know.

Why You Should Avoid Binary Options

July 27, 2016 By Nick James 1 Comment

There is no doubt that binary options trading has become increasingly popular among retail investors all over the world. The main reason for such rapid growth behind this type of trading is the overall relative simplicity of the type of investment. In the most simplest of terms, binary options trading predicts whether the asset value will increase or decrease in a given time frame up to the maturity, namely choosing between “call” and “put” options. In the end, you observe either a profit or loss on your bet.

While binary options trading has become more popular in recent years, it may not be the best option for you and your stock portfolio. There are a number of factors that should be considered if you are thinking about putting cash into binary options, including a potential $0 payout once everything is said and done. Consider the following points before you make a final decision.

Is it really a type of trading?

The word “bet” in paragraph one was not used accidentally. In the opinion of many financial advisors, binary options are a form of gambling rather than a financial instrument or trading. Options are quite risky and here’s why…

Imagine that you have chosen a “call” option on Amazon shares in 1-minute time-frame. Logically, it is almost impossible to predict what will happen to these shares upon such expiry time. Following the logic, for such short-term trades you will unlikely be able to observe any trends or read a single announcement to support your investment decision. Hence, the outcome of this trade depends purely on luck, just like your cards at the Blackjack table.

Some investors think that the most decent binary options trading type is long-term. However, most financial markets present better alternatives for long-term investments than binary options.

Unrealistic expectations from options brokers

Some people have found that binary options trading often feel like frauds or scams. This is not true but you should approach every binary options trade with caution and seek financial advice prior to entering an agreement. There are numerous reputable brokerage firms that are supervised by various regulatory authorities that can assist you in this. However, these legit brokers are slightly outnumbered by non-regulated participants so be sure that you are getting advice and direction from a registered financial advisor.

Traders have found that one of the main problems with binary options brokers is providing unrealistic expectations of your options trading return. If you would like to avoid this, you can personally look up terms and conditions of each broker’s services and witness enormously high payouts (or not). Some brokers will promise low costs and entirely controlled risks which is impossible for any broker to truly promise. Since binary options trading was initially considered a flagship in online trading, a lot of stories written by ordinary people sharing different success stories about “easy money” or “100% money-maker” appeared across the web. This was the very case with IQ Option.

In practice, most of these claims confront the reality. Moreover, traders quite frequently lose their money because they simply cannot manage high uncertainty and risk. Therefore, binary options do not represent absolute winning opportunities. Adequate trading experience with feasible strategy is recommended if you ever wish to try betting on binaries.

In conclusion, most financial advisors will advise you against investing in binary options. They conceal an unjustifiable amount of risk and do not present real investing such as stocks or Forex. Even though it is still possible to win a large amount of money, this would rather be an exception than the generally accepted rule. Binary options brokers may promise you great opportunities, though it is questionable if they will meet any of your expectations. If you choose to move forward with binary options trading, know the risks and know the probability of receiving a return.

Have you ever traded in binary options? How did you fare?

Photo: Flickr: OTA Photos

Alternative Investments to the Stock Market

January 16, 2014 By James Hendrickson Leave a Comment

If you’re thinking of investing your money, you’ve probably had a lot of people tell you to invest it in the stock market. However, the stock market isn’t the only option when it comes to investing. There are plenty of alternative investments out there depending on your level of risk. Below are a few alternative investment ideas that you may want to consider.

Real Estate

While a lot of people may still be wary about investing in the real estate market after the 2008 crash, the low prices make real estate a decent investment opportunity. The best ways to get involved in the real estate market are to buy rental properties as an individual owner, to buy shares in a real estate investment trust, or to join a real estate investment group or to buy distressed properties. If you find the right tenants and manage your properties correctly, investing in real estate can provide a decent return on your money.

Private Equity

Investing in private equity means investing money in a private company that does not have public stock. You would contribute money to a company and receive returns once the company reaches a certain stage (which is usually when the company decides to go public). While investing in private equity can be risky, especially if the company fails, the success of a company can definitely pay off in a big way if they are able to survive.

Certificate of Deposit

Certificate of Deposits (or CDs) are a low risk investment that almost anyone can get involved with. CDs are similar to savings accounts, except that the interest rate is higher and you cannot touch the money for a set period. While current yields and interest rates aren’t very high at the moment, investing in a CD is still a good idea because you are guaranteed to get a return and it’s one of the more financially secure investment options.

Peer to Peer Lending

With peer-to-peer lending, you lend money to individual borrowers at a specific interest rate. There are a number of different peer-to-peer lending companies. While there’s always an issue with people defaulting on the money you lend them, one of the benefits of peer-to-peer lending is that you can diversify your investment portfolio and lend in increments as small as $25.

Fine Art

You’ve probably heard more than one person talk about buying expensive pieces of fine art. While some people buy as collectors or art enthusiasts, there are a number of people who purchase fine art as an investment. While investing in fine art doesn’t cancel out traditional investment assets or options, it’s definitely an alternative if you’re looking for something to diversify your financial portfolio. When it comes to fine art, the art market can be risky, but it can also lead to a large financial return.

Hedge Funds

Hedge funds collect money from various different investors and pool the communal capital into different investments in order to increase the chances of a return on an investment. Hedge funds are less regulated than other investment methods which allows for investments to be made in a variety of different ways. Such a broad approach can often yield high, positive returns. Additionally, while someone who manages a hedge fund can invest in stocks or other derivatives or commodities, there have been reform acts put in place to provide more transparency about how hedge fund managers are making investments.

Venture Capital

Venture capital funds are a type of private equity that focuses on investing in the early stages of start-up businesses. Venture capital funds and firms provide the initial money for these start-ups and gain a return once the company issues stock or is purchased by another company. While this type of investment can be risky and may not provide a return for several years, the returns can sometimes be quite high.

Commodities

Investing in commodities means investing in large-scale resources such as fossil fuels (oil or coal) or precious metals (copper or gold). The commodities market is extremely volatile and unpredictable, but many of these markets tend to climb after their unstable years and provide high returns. A good way to get involved in commodity investment is to become part of an exchange trade fund.

(Photo courtesy of Diana Parkhouse)