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Watching the markets #FinanceFriday

This week I have been watching the markets even more closely than usual. The US markets are seeing record highs while the UK market is more subdued. I think that the US market is the one that is more in danger of panic and a crash. On the UK market, I’m looking for bargains and some commentators are saying that some stocks are undervalued. We are seeing some takeover interest and it looks like the AA might be the first to be taken over. I don’t see that as good for the company. It had been a zombie company for a while though so it is overdue for a shake up.

watching the markets

Oil

The oil price is still low but there was news this week that US stocks of oil are falling. We could see the oil price start to improve as the world’s economies try to get back to normal. Oil from shale has been cut as demand plummeted and that won’t be resumed very quickly. That could mean that oil company stock might be a good investment for 2021. I am favouring the bigger players in the oil and gas market like BP and Royal Dutch Shell. We shouldn’t forget gas either which should have a price that is rising through the winter. RDSB pays a quarterly dividend and so could be the better choice.

Stimulus

Stimulus from governments around the world is going into property and the stock markets and is likely to continue for some time. The risk is that it will drive inflation. At least here in the UK the pound is appreciating against the dollar and should help keep inflation in check. The Federal Reserve appears to now be accepting that inflation in the US will go above 2% and are aiming at an average inflation rate of 2%. The pound appreciating against the dollar hasn’t helped my eToro investments that are valued in US dollars but I have learned to add funds when the pound is high and withdraw when the pound is low. I have been losing money in sterling terms since I invested in eToro mainly because of an appreciating pound.

Watching the markets

I’ve been watching the markets to see how the pandemic has changed attitudes. Gold has appreciated well and many are asking whether recent falls will take gold back to where it was at the beginning of the pandemic. I don’t think it will fall that much. Much of the increased value in gold will be retained and some gold miners are saying the same thing. Gold could be a long term investment. It is a shame silver is subjected to VAT or that could be a good investment too. You can invest in silver, VAT-free, with eToro.

Property

Property is always a good investment and rich buy-to-let landlords are getting easy mortgages and are making easy money. That’s how Donald Trump made easy money, it wasn’t because he is a financial genius! The economic system favours the rich and it probably always will. The small investor has the odds stacked against him and does need to be a financial genius to make any real money.

That’s all for this week. Keep watching the markets and as always, do your own research before investing. Be thrifty, frugal and careful for a better financial future.

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