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Six things individual investors should avoid in 2022

individual investors
Stock market correction is overdue and likely imminent, say 70% of top analysts.

March 18, 2022 –Hispanic Solutions Group

In a recent new survey, a group of top stock market experts revealed that the investments or practices they recommend should be avoided in order to continue growing your wealth in 2022. The experts pointed to cryptocurrency as an area to watch, but also some bonds and even some growth stocks.

Respondents were asked: If there is one thing you would advise individual or retail investors to avoid over the next year, what would it be? Their responses ran the gamut.

Four forecasts and analysis:

This information is part of a series that analyzes the results of the fourth quarter survey of a specialized financial company.

-The main market strategists see that the stock will rise almost 8% in the year 2022.

-Experts forecast a sharp rise in Treasury bond yields over the next year 2022

-The stock market correction is overdue and likely to be imminent, say 70% of leading analysts

-Six things individual investors should avoid in 2022, according to the

leading market experts

-Experts Say Investors Better Avoid Next Year 2022

-Market watchers in the survey provided a variety of things to avoid, including some of the best investments out there in this moment.

1. Cryptocurrency

Cryptocurrencies like Bitcoin or Ethereum seem to be as hot as any investment in recent memory, but two of the respondents cited it as something to avoid altogether. Both Marilyn Cohen, as well as Chuck Carlson, say it shouldn’t be on investors’ buying radar at all.

It is important for investors and traders to understand that most cryptocurrencies are not backed by the assets or cash flow of any underlying company. In this regard, it contrasts sharply with stock investments, where a company’s long-term performance drives performance.

However, with cryptocurrency, the price is driven by the addition of more

speculators, or what is called the dumbest theory of investing. It’s one of the reasons

why investment legend Warren Buffett refuses to touch things and

warns you not to do it too. According to experts

THE DATA.-This is how stocks compare to cryptocurrencies and what you need know about each.

2. Long-term bondsClark A. Kendall warns investors about long-term bonds.

Why long-term bonds and not all bonds?

Bond prices move inversely to the direction of interest rates. If interest rates rise, bond prices fall. If rates go down, bond prices go up. But this effect is even more pronounced with long-term bonds.

The longer the bond, the more it will be affected by changes in interest rates.

With the Federal Reserve slowing bond buying and poised to raise interest rates next year in 2022, many market watchers are expecting a much less favorable climate for long-term bonds. Bonds are paying historically low interest rates, so long-term bonds falling in price could trap investors for years in a low-yield investment.

3. Growth stocks at any price

What is the investment to avoid for Patrick J. O? Paying any price for growth stocks.

That was the play in 2021, but with interest rates poised to rise in 2022, one should look to buy growth at a reasonable price, says Hare.

As interest rates rise, many investors switch to equity securities, and higher-priced growth stocks tend to be punished. Many previously high-flying, high-growth software-as-a-service (SaaS) stocks have already fallen sharply from their recent peaks in anticipation of this shift, experts say.

4. Emotional decision making

Whether you’re buying or selling, several of the experts surveyed pointed out the dangers of emotional investing.

The key to avoid Michael K. Farr, making short emotional investment decisions

term. For Kenneth Chavis IV, CFP, a senior wealth manager, it’s panic selling during bouts of pandemic-related volatility.

Any way you look at it, emotional decision making is the kind of thing that drives you to sell a long-term winning investment because you’re worried it’s going to drop this year. You are so worried about losing money that you lose the opportunity in the long run. Use that volatility to your advantage and stay away from emotional decisions.

5. Technology stocks

Given the strong run in tech stocks over the last decade, it is possible that the technology is not the most obvious candidate to watch out for. But many companies have debuted looking to take advantage of indiscriminate investor demand for tech stocks without being able to deliver the products.

Never fall in love with technology, says Kim Forrest, Look at the financial incentives that drive the adoption of a technology.

Electric vehicle stocks are a good example here. Many companies are looking to tap into the enthusiasm that has propelled Tesla into the stratosphere despite a less developed business or, in some cases, a business that has yet to generate significant revenue.

With interest rates poised to rise next year 2022, tech stocks growing may not be as beloved as they usually are, but the right ones still they could perform well, especially in the long run.

6. Emerging Market Stocks

You’ll also want to watch out for stocks in emerging markets, Dec Mullarkey says. These markets often have less robust economic and governance barriers.

Mullarkey expects some of these markets to prove problematic for investors.

“Large segments of emerging markets will struggle against high inflation and normalization of activity,” he says. “Latin America, in particular, will continue to have an unstable political background in many of its major economies.”

Finally. –Those looking to invest in emerging markets may want to choose their locations carefully to avoid a disruptive political or economic situation.

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