Festive Opportunities for Investors – The Key Considerations

Christmas is nearly upon us, and this is a time where most households are focused on getting their decorations up and making sure they have enough presents under the tree.

However, investors may view the festive period a little differently, as this time of the year provides fresh challenges and opportunities to generate income and leverage unique market trends.

But what markets are investors likely to target this Christmas, and how can you leverage them to your advantage?

Cryptocurrency – The Rise and Rise of Bitcoin

While it has been a volatile year for Bitcoin (BTC) and other leading altcoins, the growth of this asset over the course of the year cannot be denied.

On December 9th 2020, a single BTC token was valued at £13,866.24, but barely 12 months later this number had increased to £37,455.56. This represents a nearly three-fold increase through 2021, despite some incredible peaks and troughs during crypto bull and bear runs.

Some investors remain incredibly bullish about BTC for the remainder of 2021, suggesting that the asset could peak closer to £75,823.50 ($100,000) by the end of the year.

Even though this may seem a little ambitious to some, there’s no doubt that BTC’s value will continue to appreciate over time and help to establish it as a viable buy-and-hold asset for the coming months.

Forex – A Cyclical Market

The forex market is one of the biggest entities of its type in the world, while the derivative nature of currency makes it highly appealing to speculative investors all-year-round.

This is partly a cyclical market too, however, with the marketplace typically seeing a surge at the beginning of each year and creating peaks in volatility during this period.

However, this immediately follows a lull over the Christmas period, during which time many traders take a break and create a scenario where low liquidity and minimal volatility prevails. Many of the big banks and institutional traders drop out of the market at this time too, exacerbating the issue and creating a lack of movement to trade against.

So, while the New Year may offer opportunities to forex traders, it’s probably best to avoid this marketplace or minimise currency trading activity during the festive period.

Stocks – On the March During Christmas

Of course, stocks represent the most obvious investment vehicle during Christmas, particularly when you consider equities based in the retail and leisure markets.

Certainly, most retail outlets see significant spikes in consumer spending and confidence during the festive period, creating increased revenues for firms and share price hikes across the board.

Other growth stocks during Christmas include transportation shares (such as Fedex and UPS) and online marketplaces such as Amazon, while toy firms and the manufacturers of recreational products become increasingly popular at this time of year.

Now is the ideal time to invest too, before price hikes take hold and a relatively limited window of opportunity closes.