Although the economy of the United States has been performing well in recent times, astute investors are always looking towards the horizon. The fact of the matter is that the markets tend to be cyclical in nature. What comes up can (and will) fall back down in the form of a re-correction. This is why many traders are looking to diversify into additional sectors in an effort to stave off the volatility associated with a single holding. Thanks to the digital age and a host of worthwhile investment platforms, there are a host of options available. One of the most potentially lucrative areas involves cryptocurrencies. What is the appeal of these digital holdings and why might they perform extremely well in 2019?
Could Cryptocurrencies Lead the Way?
Cryptocurrencies are simply alternative forms of traditional financial transactions such as electronic wire transfers and credit cards. However, they are completely decentralized in terms of being controlled by a specific bank or financial institution. They are also associated with high levels of anonymity; ideal for those who are looking to keep their privacy intact when performing an online transaction. While all of these qualities are attractive to individual consumers, the real appeal of crytocurrencies involves their past price history.
Major units such as the Bitcoin have experienced exponential levels of growth in recent times; due in no small part to the fact that such units are becoming very popular methods to perform online business. However, cryptocurrencices are also associated with a fair amount of volatility. Anyone who has ever ventured into the Forex marketplace is well aware of this observation. While a great deal of money can be made within a relatively short amount of time, the exact opposite is just as true. One’s holdings can quickly fall; resulting in mounting losses if left unchecked.
This is why cryptocurrencies re extremely tempting for investors who are not entirely afraid of risk. For the very same reason, the trades themselves are generally executed within a relatively short period of time in an attempt to mitigate such risks. While there is no doubt that long-term positions will provide financial stability and relatively predictable returns, the fact of the matter is that the liquid nature of the cryptocurrency marketplace should attract a growing number of investors in the coming year.
Still, not all individuals are ready or willing to take a plunge into the world of cryptocurrencies. One interesting alternative is to employ the use of a home-based business to generate extra liquidity. These funds can thereafter be invested into more stable sectors such as precious metals or blue-chip stocks. Let’s take a look at the basic mechanics behind such a strategy.
Home-Based Business Ventures: Providing Financial Breathing Room
Success will first begin by coming up with an innovative business concept. Of course, the exact idea in question will depend upon the individual as well as his or her experience. Assuming that this concept has been deemed worthwhile to pursue, it will then be necessary to create a website as well as to deal with e-commerce issues such as online payment options and alternative methods of shipping (such as drop shipping). The good news is that companies such as Oberlo and Shopify are able to provide users with agile platforms in order to tackle such concerns with ease.
It will then be necessary to determine how much money one wishes to place into a certain investment position. We need to keep in mind here that the main goal is to accrue financial liquidity while averting extremely volatile positions. Thus, it is wise to look into more conservative holdings. While there is nothing wrong with dabbling in cryptocurrencies, these should represent no more than ten percent of the total portfolio. In the event they their value suddenly falls, this loss can be effectively offset by gains in other underlying assets.
The ten-percent rule is just as appropriate in terms of the total value of the portfolio. Home-based business owners should never invest more than ten percent of their capital within the online marketplace. This reduces the chances of incurring a crippling loss that might affect ongoing operations such as sales or product development.
It is also worth pointing out that it can be extremely difficult to keep one eye affixed to the marketplace and the other on day-to-day business operations. While many online trading systems such as Meta Trader 4 will undoubtedly come in handy, the fact of the matter is that it might be a better idea to procure the aid of a trained financial adviser. These professionals will offer a level of full-time insight that would be nearly impossible to achieve with one-off trading methods. Cryptocurrencies could very well be the wave of the future and if approached correctly, profits may soon follow.