We have finally seen off 2020 — a milestone most around the world will welcome — and we’re beginning to see light at the end of the coronavirus tunnel. That doesn’t mean we’ve reached the end of this international nightmare just yet. But vaccines appear to be on the way (yes, really this time), and that’s something!
We reported on the ‘UK Government Seriously Considering a Compulsory COVID-19 Vaccination Program’ and that will certainly spark fresh debate, and unease among those who don’t trust the vaccine. But that’s a bridge we can cross when we arrive at it. The mere fact that the government has reason to consider something like this is a positive sign that citizens will be able to be vaccinated before too long — possibly in the spring of 2021.
Naturally, the best part of all this is that we may be able to safely return to something resembling ordinary life. But another positive result might just be an economic uptick. It goes without saying that the global recession we in the UK have gotten more than a little caught up in was caused by the pandemic itself. And while the easing of that pandemic won’t automatically turn around major world economies, it should help in some regards. Widespread vaccinations and ongoing precautions will lead to more ordinary life; more ordinary life will lead to greater optimism and consumer activity; and optimism and consumer activity can lift an economy out of a difficult time.
If this all plays out more or less as described, it’s also likely to bring about an uptick in investment. But the interesting question is going to be which markets people are confident putting their money in. Understandably, the market collapses we saw back in the spring of this year left many feeling skittish about conventional investment. And hopefully those sentiments ebb away when it’s appropriate for them to do so! But in the meantime, as we look ahead to that light at the end of the tunnel, it’s worthwhile to consider which investments people may favour when they do start to invest again.
It may well be that the ones people gravitate toward will be those that have actually been least negatively affected by the pandemic to begin with. Following this line of thinking, three popular investment markets stand out.
Cryptocurrency
A year ago, cryptocurrency still seemed like a little bit of a fringe market. There was plenty of value going around, and plenty of investors got wealthy trading assets like bitcoin, ethereum, and the like. But the average person looking to establish a portfolio and build wealth still looked at cryptocurrency as something undefined, uncertain, and risky.
It may still be those things, but it is also — undeniably — among the trading markets that functioned best during the worst of the pandemic. While cryptocurrency prices did fall when the market all around the world first dropped off, the major coins bounced back rapidly and then kept climbing cryptocurrency has proven that it can withstand a recession, and some of the top assets in the category are now trading near all-time highs.
Forex
Forex is almost a difficult market to assess in broad strokes, because it is comprised of major currencies from all around the world. Clearly, we’ve seen some of those currencies struggle more than others during the pandemic and recession, such that investing in one currency might not have been as productive as investing in another. In forexthough, that’s not so different from ordinary circumstances.
In FXCM’s examination of forex trading, a section on how to make money in the market points out that because of the market’s depth and liquidity, “it is possible to implement almost any viable strategy” and find success. It also points out that traders can profit by being long or short on a given asset — essentially meaning currency value gains and losses can yield profits. Given these general conditions, it’s fair to say that fundamentally, the forex market has remained relatively unchanged.
Housing
This one has been baffling some analysts (as well as casual observers) for months. But it’s a simple fact at this point that the UK’s housing market has somehow avoided any sort of meaningful struggle throughout the difficult circumstances of 2020. In fact, when The Guardian looked into the housing market just recently, it determined that house prices actually jumped at the “fastest rate in four years.”
To be clear, some still expect to see a belated effect. Additional COVID-related controls this winter could slow down the market. And if this happens and we don’t see a return to normal as soon as we’re beginning to hope for, that slowdown could persist. In other words, keep a close eye on housing, as it could conceivably suffer a sort of late-stage pandemic effect. But for now, housing has to be mentioned among the investment markets that have withstood the year’s complications.
Beyond these markets, there’s considerably more uncertainty. Commodities have been all over the place (gold thriving, oil crashing, etc.), and need to be considered individually. Stock markets have largely recovered and according to BBC are soaring in the hopes of a vaccine, but could always turn at a moment’s notice in a time like this. But cryptocurrency, forex, and housing investment look to be relatively stable alternatives.
That does not mean that putting money into these markets will automatically net returns as we crawl our way out of this pandemic. Investing always involves risk, and in a time like this any piece of news can turn a market upside down in a hurry. If things do begin to turn around though, and people gravitate toward the markets that acquitted themselves well through the worst of 2020, these are the ones that will stand out.
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