In the stock market world, and trading in general, things are continually changing as the world does. Since the trading market usually represents a mirror of the economy we are in, it’s logical it can give you hints where we are headed. The concept might seem unusual, but it is quite simple; if you observe the market for some time and see what people are buying and selling, you will deduct what is popular and what can grow or go low in the future.
Of course, there is much more to it, especially in 2020. People will buy stocks if they aren’t familiar enough, just because marketing is good. That’s why learning about the stock market is a process, and it’s useful to know as much as you can (and if you are not an active trader, as much as it is fun to you), so you can make some financial decisions even though you are not a trader. Maybe you are going to become one after you get into the logistics of it. Whatever the case is, the stock market in 2020 was quite unpredictable and exciting, and it brought lots of new things on the table, even though volatility was still an issue on the market.
Brookfield Property Reit was great for value investing in 2020, a real estate diversified company with more than 2000 assets in 20 countries. Their goals are to make long term returns on equity (meaning 12-15%). This sounds robust and looks highly underpriced, making it a good investment since we can expect it to grow in the next couple of years. The other perfect fit for value investing is NRG Energy included. It is a service used by 3.7 million US customers. The settlement between them and Direct Energy will be finalized by the end of the year, which will also influence the price (it will only go higher). Value investment is generally a good choice because you know the price will go higher, but you buy it while it’s still underpriced.
Top growth based stocks
This strategy focuses on any business that has the potential to grow faster than the market will. To give an example, one of the fastest-growing stocks this year is Zoom Video Communications, which was mainly because of the pandemic because people started using it from talking to their loved ones, to hanging out virtually and having business meetings and courses. The other one is Salesforce Inc, a cloud-based company that deals with software and offers CRM programs vital for any companies that deal with many clients. As the name implies, growth-based stocks show potential and consistent profit growth, making them great for investing and the highest year to year earning.
Top momentum-based stocks
Top stocks that draw attention are still Tesla and Moderna inc. Why? Because these stocks already had higher prices than the market as a whole and outperformed outstanding this year. This implies the trend will continue, momentum has begun, and that’s why investors like stocks that already performed well.
Knowing Elon Musk and the famous Tesla company, they keep showing growth, where they succeeded in delivering 90 thousand vehicles in late 2020.
Moderna Inc. is an entirely different type of company, focused on biotechnology, to be more exact vaccines and therapeutics. The Canadian government ordered their COVID-19 vaccine in value of 20 million doses.
Now that you have a brief outlook on most essential stocks in 2020, it can be a bit easier to understand what to expect, stock-wise. Do more in-depth research if you are interested in a specific stock and search for a regulated and licenced broker to decide you want to get into trading.