eToro
By eToro
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How to Survive a Bear Market

Some claim that 2018 was the worst investment year in recent times. It was full of market volatility and economic downturns, and many investors now look back with regret at profits that were wiped out, or chances that were lost.

eToro 2018 Year-end Summary

However, even when markets are bearish, good investors find opportunities. Check out what eToro successful traders were doing in 2018, with this year-end summary:

Top 10 2018 Stocks on eToro

  1. Amazon
  2. Facebook
  3. Tesla Motors Inc
  4. Netflix Inc
  5. Advanced Micro Devices Inc
  6. Apple
  7. Alibaba
  8. Alphabet
  9. Cronos Group Inc
  10. NVIDIA Corporation

In 2018, US stocks went on  a rollercoaster ride. With 9 of the top 10 stocks coming from the technology sector, it is evident that the market faced a surge in the first half of the year, led by these industries. However, something truly unexpected happened in February.
Cronos Group became the first cannabis stock to be listed on a major exchange, the NASDAQ. By July, the company announced a joint venture with a group of investors to build an 850,000 square foot cannabis greenhouse, with an expected annual output of 70,000 kilograms.
Canadian Prime Minister Justin Trudeau’s aggressive push to legalise recreational marijuana can be attributed as one of the main reasons for the rise of the marijuana market.
As Cronos CEO Mike Gorenstein claimed: “$1.8 billion from Big Tobacco is just the beginning for the cannabis industry.”

2018 Top 5 Currency Pairs on eToro

  1. EUR/USD
  2. GBP/USD
  3. USD/JPY
  4. USD/CAD
  5. GBP/JPY

Looking back at international markets, several major events took place this year:

  • The first and probably most significant effect on the global economy is the trade war launched by President Trump against the European Union, Canada, Mexico and China. Despite this bold move by the president, annual economic data indicate that the economy of the United States is still performing outstandingly all around the globe.
  • The second is the Federal Reserve’s monetary policy, which included several rate hikes over the past year. At the same time, Europe needs to solve economic problems of its own, caused by Italy and Greece, while the European Central Bank plans to end quantitative easing this year and raise interest rates as soon as the autumn of 2019.
  • The USD has been very strong this year. The dollar started rising from a low in April to a high in June, and continued after September, when it displayed volatile upward momentum.
  • One major reason for the strength of the dollar in 2018 is the trade war. Since USD is the world’s largest reserve currency, whenever there is a crisis or friction around the world, we can expect to see an upward trend. First and foremost is that selling dollar-denominated assets such as bonds, commodities, real estate, and stocks disguise increased demand for the dollar. As a result, in times of tension or turmoil such as a trade war, the dollar will receive support.
  • Economic indicators in the US performed well in the second and third quarters of this year, with the GDP rising more than 4 points. This is due mainly to the massive tax cuts implemented by President Trump. However, the stimulus caused by these big tax cuts may be short-lived. If the economy of the US falls back next year, US stocks could potentially collapse.
  • In the ongoing aftermath of the Brexit vote, the situation of the GBP remains unpredictable. However, whether or not the UK decides to leave the EU, will not change the fact that, when the dust inevitably settles from this monumental decision, GBP is still predicted to rise. Financial markets are most fearful of uncertainty, and markets are often shaken by unexpected events, otherwise known as black swans. With this in mind, it does not matter if the UK decides to leave the EU. All that matters for the markets is that the event is currently in progress, so there is still uncertainty. If the uncertainty ends, then the Pound can rise again.
  • The unstable situation of the world allows USD/JPY to receive more attention because it is known as a safe-haven currency. In addition, since the United States and Canada were closely linked in the first half of the year, the USD/CAD pair remains popular.

The Hottest Product on eToro in 2018:  XRP

XRP was regarded as the cryptocurrency with the most potential in 2018, and it is still one of the most stable cryptoassets during the current market downtrend. Not long ago, XRP replaced Ethereum as the second largest cryptocurrency by market value, and many people were very interested in the possibility that a digital currency could break through the fierce competition and pass Bitcoin to reach first place.
XRP did particularly well in 2017, rising 3000%. This performance was much greater than that of both Bitcoin and Ethereum.

The eToro Newsfeed

In 2018, 1,156,301 posts and 3,747,106 comments were posted on the eToro Newsfeed.

Even in these bear markets, smart investors sum up their experiences and find new opportunities in the down trend.On the eToro Newsfeed, clients can easily see other traders who share their investment experiences and trading strategies with the community.

2019 Market Forecast

The Asset That Shows The Most  Potential for 2019: Crypto

At present, the global economy seems to be gradually declining. Geopolitics and trade wars are raising panic levels, and digital currencies such as Bitcoin have the potential to become the most valuable investment asset in the future.

There are three reasons for this: First, many countries have paid attention to the development and application of digital currencies in order to solve some of their own financial issues. Secondly, these digital currencies have suffered significant losses since they hit a record high and some undervalued cryptocurrencies may show great potential to rise in the future. Last but not least, the introduction of regulations and rules will create a more regulated and approachable cryptocurrency environment.

The Industries Show the Most Future Potential:  Retail & Driverless Cars

In the near future, the retail sector may be one of the most eye-catching and promising markets. Following the success of China’s Singles’ Day celebrations, both Alibaba Group and JD.com notched new sales records, and the holiday shopping season can further add to these E -commerce giants’ success.
The holidays are equally important for US retailers as they are for the Chinese. Statistically, around 30 percent of annual retail sales occur between Black Friday and Christmas. E-commerce giant Amazon was well prepared for this rush, and offered free standard shipping to all customers throughout the holiday season. Good performance during the holiday shopping season could give a real boost to the retail segment going into 2019.

Another market sector to watch is the driverless car industry. The sector combines  high tech companies, software developers and automotive firms, making the driverless car sector a hot ticket in 2019. However, it may come as a surprise that self-driving car stocks were actually among 2018’s worst performers. In retrospect, the reason could be quite simple: there is high spending for research and development, so, many companies see their spending in 2018 as a long-term investment. Going into 2019, this industry still shows huge potential, especially considering the much anticipated IPO of Uber, which is also taking great strides in the autonomous car space.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Cryptocurrencies can fluctuate widely in price and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance is not an indication of future results. This is not investment advice. Your capital is at risk

Data presented is accurate as of 12th December 2018. Past performance is not an indication of future results. 

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