Commodities trading is normally a good investment strategy, but the COVID-19 pandemic changed the financial landscape quite a bit. Expert investors like Nicholas Kyriacopoulos continue to thrive because they adjust appropriately to the changes wrought by a global pandemic. Here are some things you should consider as you plot your financial future in what are hopefully the waning days of the COVID-19 pandemic.
Shifts in Demand
Since the end of 2020, there have been multiple analysts providing details about the performance of commodities since the beginning of the pandemic. Almost across the board, those investments decreased in value throughout the year. Agricultural products and similar commodities saw mixed results but still underperformed overall. Oil saw a sharp drop, largely because of the decrease in commuter traffic over the course of the year. Only gold remained strong as demand shifted away from commodities.
Nicholas Kyriacopoulos understands that moving through the pandemic is not just a matter of reaching the finish line. The recovery of the market will take time, and commodities will not just snap back to their former level. Instead of banking on a fast recovery, you should instead monitor the rise in demand so you know when to return to commodities stocks. In the meantime, focus on other investment opportunities.
The Volatility of Commodities Trading
There’s always a risk involved when you trade commodities, but the level of volatility has greatly increased during the course of the pandemic. Some of this has to do with a decrease in demand, but there’s also a degree to which people are unsure what commodities will recover from the changed market. Many experts believe that, even after the pandemic ends, the impact on the market will linger, possibly for years to come.
Times like these are when the advice of Nicholas Kyriacopoulos rings especially true: make sure that you keep a diverse portfolio. Doing so means that you can reallocate money that would be going toward commodities and shift those investments to markets that are likely to perform well in the near future. You can hold onto these investments and then shift the money back to commodities when the market finds its footing again.
Returns are Poor During the Pandemic
Returns on commodities have not been great during the pandemic. With that said, you might feel courageous enough to devote a percentage of your portfolio to this market, targeting those commodities that are at least holding their value. The odds of turning a profit with this strategy are slim, but you might be able to buck the market trend.
Even if you find a commodity that gains in value, don’t expect a profit equivalent to what you would have received before COVID-19 swept across the world. Adjust your expectations accordingly and you will be less likely to panic at the slim returns you receive. Optionally, you might choose to follow the advice of Nicholas Kyriacopoulos and invest elsewhere, returning to commodities a few years into the future.
Seeking Better Investment Opportunities
Just because the market is depressed does not mean that investors like Nicholas Kyriacopoulos have stopped buying stocks. Rather than focus on commodities, though, they have looked toward other markets. Some companies are offering services that are in high demand during the lockdown.
Consider, for example, technology that focuses on web and video conferencing. Not only has the demand been there during the pandemic, but the lasting lessons learned from this time is likely to keep that technology in frequent use moving forward. Even late in the pandemic, there are still innovations like this that you can take advantage of.
Protecting Yourself from Losses
In order to manage your portfolio successfully, you need to understand what investments will generate the best returns. This requires you to study the market, seek out advice when necessary, and make sure that you have a diverse set of holdings so one major loss doesn’t tear apart your entire portfolio.
Keeping a range of different holdings means that, when the pandemic ends and the market recorrects, you will be in a good position to shift your investments accordingly. You won’t be chasing after losses that you suffered, but will instead be able to increase the wealth you gained.
Nicholas Kyriacopoulos has built upon his wealth during the pandemic, and you can too. Take the time to make wise investments, avoid dipping deeply into commodities, and explore options that you might not have considered before. Nothing is ever a sure thing, but you can make your investments pay off with patience and insight.