2020 has been an exceptionally poor year for the global economy and that fact does not need to be overstated. However, it has not been a bad year for hardcore, veteran investors. A bear market is, after all, an ideal place for major investors to reap the benefit. They buy in bulk when the chips are down and sell strategically later on, to both help the company and their own profits scale up with time.

However, that does not necessarily mean that any stock the average person buys in 2020 will somehow double in the near future. In fact, a large number of both national and international stocks will not be going up anytime soon. With so many bankruptcies, mergers and acquirements going on all around, every small investor needs to be particularly cautious about the options they have. With that in mind, here’s a brief list of the top investments that you can make with the hope of them being profitable down the line.

Guaranteed Investment Certificate (GIC)

Bank GICs come with a reliable rate of interest, which, under normal circumstances, would be much higher than what a bank might be able to offer on a regular savings account. What makes them excellent investment in this time of uncertainty is the fact that all Guaranteed Investment Certificates come with the Canadian Government’s guarantee, and it doesn’t get much safer than that. As long as the country doesn’t topple over, you will be getting what you were promised. However, there are a few facts that you should be aware of before buying a Guaranteed Investment Certificate, such as:

  • Once you invest an amount in a GIC for a specific time period, the money is locked and, therefore, cannot be withdrawn before the maturity period arrives
  • In urgent situations, the investor would be able to withdraw the money, but only after paying heavy penalties or fines, which will be levied on the principal amount
  • Post maturity, the investor will be getting back their principal + interest in full
  • Interest rates on GIC are variable, so it is better to invest in multiple GICs over the course of time, rather than investing it all in just one
  • The necessary time period during which the money cannot be accessed without incurring a fine can range from just six months to ten years
  • Long term investments offer better interest rates
  • Redeemable GICs are the only ones that can be withdrawn at any time without a penalty, but they offer a very low rate of interest

Initial Coin Offerings (ICOs)

Initial Coin Offerings or ICOs are not the safest investments you can possibly make, but they do come with the potential for high returns. So, the conclusion here is that if you can afford to take a few calculated risk, ICOs can indeed be considered as potential high risk vs reward scenarios.

Unfortunately, ICOs in recent times have also given rise to a new type of financial scamming, aka, the pump-and-dump scams. The importance of verifying the origins of an ICO cannot be stressed on enough because of this specific reason. If you end up investing and losing money in an ICO that’s genuine, it would be part of the risk that comes with ICO investments in general, however, if you make the mistake of investing in a scam ICO, at no point will you have any chance of recovering a single cent of your money again. It is possible to identify such scams, though, but you will have to be very thorough with your research.

Diversified Stock Investments

Stock investments in the medical sector are a lucrative option right now, but it’s not the only option you have. As of now, you should concentrate on diversifying your investments across mostly online business models. While the offline sectors are reopening, there is no telling what the future might bring, which is why even major investors are playing it somewhat safe for now. That being said, the situation can and will keep changing quite rapidly, due to the recent and unprecedented developments.

It is important right now to follow updates regarding stock market conditions, via a reliable source of financial information. Like its name suggests, Wealthsimple, a multinational financial company just simplifies everything about investments and making money for their clients and even casual followers of the blog. Check out their latest post on the best trading platforms in Canada, where they go into detail regarding how crucial even the selection of trading platforms can be when it comes to online stock trading.

The Canadian Savings Bank Account

The savings account is often not used as a way to save and invest money like the name suggests. Rather, it’s treated as a temporary place for small amounts of cash to accrue perhaps only a small interest, if any. However, a Canadian savings account is more secure right now than most other high-yield alternatives. The Big Five Banks are the safest and most assured options, but their savings account interest rates may not be the best out there.

Look around a bit and see if there are no online banking options available that you can rely on for small investments. Also, the bigger the bank is, the higher minimum balance they will demand from you to be able to hold an account with them. Instead, opening a high-yield savings account with one of the smaller but reputed banks might prove to be a lot more profitable in the short and long term.

Investment Funds

There are primarily two different types of investment funds, which are exchange traded funds (ETFs) and mutual funds. They are at a low right now and as long as you manage to pick the right ones with the help of the right financial expert, you too could be making it big in this bear market. Keep in mind that if you do invest in mutual funds and ETFs, it should be for a duration of no less than 3 – 5 years, given the market conditions. You will need to pick ones that are most likely to survive and later succeed after the pandemic is truly over, but at the same time, as an investor, you must also allow them the time they need to rebuild their financial core. In simpler words, investment funds never were, and neither are they now, ideal for short-term gains.

Established Cryptocurrencies

There is a stark difference that exists between ICOs and established cryptocurrencies. That difference is big enough so that the two are not even comparable. An ICO, even when legitimate, is a high-risk investment today, albeit with the promise of high returns. Established cryptocurrencies like bitcoin, on the other hand, are not exactly risky investments at all if you can time your purchase with some degree of financial perfection. For example, let us take bitcoin, which was the first and still remains the most valuable cryptocurrency in 2020.

Unlike the kind of volatility which crypto traders had seen with bitcoin in previous years, the situation has changed after the pandemic, as bitcoin proved to be steadier than gold and major stock markets. When the rest of the biggest asset class investments were going down, the cryptocurrency somehow managed to show a less volatile, steadier and reliably rapid growth between March and October of this year. How it fares in the future is something that remains to be seen, but all predictions point towards bitcoin crossing its previous highest value of $,19,783, by the end of 2022.

Even setting aside bitcoin, Ethereum also deserves some mention as it has shown a very volatile and rapid growth during the lockdowns. Many would argue that Litecoin with its halved value right now is a poor choice, but financial experts are banking on Litecoin’s rise, which is expected in general. Whichever currency you choose while trading, just ensure that it is a well-established one. Sooner or later, chances are pretty high that the price will begin to rise again.

Real Estate

Real Estate is going to be a risky investment right now because at least in Canada, records have been broken in terms of the market coming back to life after months of dormancy. It shows how resilient the real estate segment is, which makes it an excellent place to invest money at nearly any point in time. Even then, you may want to keep yourself from buying high-value properties right now as assets since there’s a better option. Sections around the major cities in Canada have not yet seen the same degree of resurgence yet, so keep an eye out for properties in these areas and buy intelligently before the boom skyrockets the price.

There are other investment options out there of course, but as far as the most prominent and promising ones are concerned with 2020 in view, these might truly be your best options. Before making any major investments though, you may still want to consult your financial advisor for more specific information regarding what to buy and when.

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