Monday, November 30, 2015

Prepare Yourself to Invest in 2016: Ideas and Things You Need to Know

 David Milberg - Investing in 2016 

As 2015 comes to an end, financial pundits, investment banks, and even average Joe investors are already drafting their ideas and picks for 2016. If you are thinking of investing some of your savings for 2016, here are some ideas to build around on and things you need to know and be prepared of.

US Dollar

Undoubtedly, the US dollar has had a pretty wild ride this 2015. As expectations of a long-awaited-for Fed interest rate hike continues to build up and signs of it actually happening in the near future further strengthening, the currency is at the crosshairs of many active investors. If you are trading the foreign exchange market, a potentially remunerative position is to buy the US dollar against the Euro and/or Swiss Franc, which are poised to depreciate if the dollar does gain further momentum due to rate hikes.

Be Cautious Of Greek Debt Crisis

For investors who have capital exposure in Greek banks or bonds, be cautious as these assets can weigh down your portfolio. However, you should not entirely refrain from investing in these currently murky markets as some liftoff is expected. While much of Europe is being ignored by investors due to its geopolitical proximity to Greece, the Eurozone still managed to increase by 0.4 percent in Q1 of 2015 as opposed to the 0.1 percent growth experienced by the US.


Although too cliche, investing in a tested and proven tech company like Google is bound to bring you some positive returns in 2016. Google is especially favored by long-term investors who expect the company to continue its upwards trajectory for years to come. Recent company reports released by Google also seem to support this positive outlook as the company's earnings where significantly higher than expected.

Emerging Countries

Markets of emerging countries tend to thrive during rate-increase environments. In fact, EMs have been able to produce a 16.5 percent ROI during rate-increase environments as opposed to 8 percent ROI during rate-decline environments. To be considered an emerging market, a country's economy should feature low to middle per capita income. Good examples would be Russia and Brazil. You can expose your capital to emerging market opportunities through exchange-traded funds and mutual funds.

Regardless of how far along the road you prepare yourself, investing is never a 100 percent surefire way to grow your capital. What separates successful investors from hobbyists is their ability to take losses and effectively manage risk.

David Milberg is a full time investment banker and an entrepreneur from NYC.

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