Everyone wants to be their own boss. Obviously there are some who are very satisfied with their jobs, such as football players and the presenters of the car show ‘Top Gear’, but in reality most people dream of working for themselves. Investing in the financial markets is one way that individuals get to enjoy the freedom of self-employment, and the luxury of working from the comfort of their home or some coffee shop with a magnificent view. Even though it doesn’t guarantee returns and the element of risk is always present, there are various choices and asset classes for entering the financial markets where investors can apply their skills with a view to creating an income. However, each market comes with its own characteristics and there are some which, either because of their past performance or future potential, may be quite lucrative to a large number of investors.
One of the most traded commodities is gold. Investors enter the gold market mainly because of its stability as it is viewed as a safe haven investment. The shiny metal’s price usually increases in periods of economic uncertainty, and traders see this investment as a good way to hedge their portfolios against low U.S. dollar prices. Moreover, everyone knows about gold’s status as the highest regarded precious metal. It has been on the market for thousands of years, used for the production of jewellery and traded as a form of currency. Investors are currently turning towards gold as the political tension between Ukraine and Russia is escalating. The unrest pushed for increased demand, and the price of gold surged by 2.8% within a two-day period to over $1,305 per ounce.
Silver investing also provides another route to entering the commodities markets. The global financial crisis which began six years ago urged a lot of investors to search for alternative investments after the sliding of many stock indices. The silver market, sometimes referred to as ‘gold’s poor cousin’, is also a method of ‘safe haven investment’ and got the attention of many who want to add stability to their portfolios. Silver is also used in the production of jewellery, but its demand increased recently in manufacturing and electronics because of technological advancements. Silver’s recent performance has been similar to the one of gold as it also increased following Ukrainian military activity towards pro-Russian militia during last week. The price of silver increased by 1.5% and reached $19.80 per ounce last Friday.
Disappointed investors from falling prices of trendy stock markets are also looking for markets which are important to the world and have long-term potential. The energy market is a very good case because it doesn’t only stand as very important for the present, but the chances are that it will be of even more importance in the future and that is why it might offer large gains. With the United States paying $0.25 trillion on power quality problems, large countries such as Brazil being behind in having the infrastructure needed for increasing energy demands, and an annual increase of 5% in energy demand within Asia, the chances are that the energy markets might continue to increase in the medium and long term. Even though crude oil remains very popular within the markets, oil companies are facing increasing costs to drill and refine it and therefore governments are spending more of their budget for energy alternatives such as fossil fuel and nuclear power.
The above assets are merely an introduction to the wide selection of global financial markets available for investing. Ultimately however, it’s up to you to decide. If you are truly looking at methods to becoming self employed, investing in financial markets is one of them. But don’t forget, investing comes with returns and also the ever-present risk.
By David Parker