The global pandemic caused by COVID-19 has significantly affected economies and businesses all over the world. Having no near precedent, the world was thrown into a frenzy in trying to contain infections. Businesses not considered essential, and companies with factories abroad had to close shop until their governments stabilized. Non-employment reached its highest rate as more people lost their jobs. In America alone, almost 43 million claimed their unemployment benefits with the projection that millions more were going to have to do the same in the next few months.
With such uncertainty and left without work, people sought out other means of making money. Online jobs seemed like a good option, but these jobs required a specific set of skills that not all had. Fortunately, an opportunity presented itself in the form of investments.
Many people worry that investments are not as secure or that having zero to little knowledge leaves them at the mercy of more seasoned investors. This is far from the truth. In fact, investing can be easily learned and accomplished. Investing in different areas is not even a competition.
Traditional investments and alternative investments
There are many ways to invest, and there are many platforms available depending on the type of investment a person feels more secure with. To simplify, investments can be classified into two categories: traditional and alternative.
Traditional investments are stocks, bonds, and cash. These are known to be more secure because assets are more well-known, and the liquidity is high. On the other hand, alternative investments are all those not falling in with those mentioned earlier three. Alternative investments are investments in commodities, real estate, hedge funds, and private equity. These may have lower liquidity, but they have less regulation. With less regulation, this means investors have more freedom to move and make decisions.
Alternative investment options
Despite the volatility of the markets and economies, investing is very much a good option. Some investing instruments need to be studied intensively and mastered while others do not.
One of the best options would be investing in digital assets. Digital assets are more flexible, as investing in them does not require extensive knowledge or vast experience. These investments can be easily managed on the world wide web and be quite profitable with the right tools. A little learning is required to understand how to use the tools without throwing caution to the wind.
The benefits of investing in digital assets are numerous. According to Capital Markets CIO Outlook, the three benefits are the following: enhanced financial returns, a perennial stream of income, and a better hold on investments. It adds that “Digital assets are certainly a better alternative than the traditional means of investments and are already influencing the current set of investors.”
With technological advancements, a new breed of investors is born. These investors are savvy enough to know which tools online can help them achieve their financial goals. The use of tools online is made more accessible with the introduction of automation, which works hand in hand with arbitrage trading.
Arbitrage trading and decentralized finance
Arbitrage trading is an investment strategy that has been in existence for decades but has now come to the fore. Arbitrage is a strategy that takes advantage of discrepancies in market prices and profiting from the difference.
Investors who engage in arbitrage trading know about the high profits and low risks involved. Now, this trading method has become even more competitive with the introduction of automation.
It is a challenge to manually conduct arbitrage trading as the profits come from finding price discrepancies in the different markets. This trading method requires speed and manually finding the data, and trading is done faster by a program and a computer.
“This is where automation of arbitrage trading comes in. A great platform is one that offers automation that is programmed to extract data from the world wide web of information, analyze which markets are more profitable and have lower risk, and most likely close the deal itself,” says Tony Jackson, Chief Executive Officer of Jenco, a decentralized financial service platform.
Traders use different software programs to achieve successful trades. One type of program is automated trading software. “This type of program is designed to overcome one of the primary challenges of arbitrage trading: the timely and accurate trade execution necessary to take advantage of trading opportunities that may only exist for a few brief seconds,” according to J.B Maverick in an article in Investopedia.
Decentralized finance can also be utilized as it has a lot of potential like arbitrage trading. According to a study by Jenco, “DeFi uses electronic devices to interact and display bidding or asking prices in real-time. Hence, traders do not necessitate being in the same location to initiate transactions. Everything is done virtually, and digital markets are made secure by blockchain technology.”
From the same report, the utilization of DeFi’s blockchain technology allows global accessibility of various financial services, low transaction prices, and secure exchanges. Utilizing DeFi is more beneficial since users do not have to follow centralized rules. Direct, peer-to-peer exchanges can occur, given that various values are agreed upon irrespective of the current offline values.”
Conclusion
A smart investor knows to strike while the iron is hot, and there is no better time than now. When employed with the right strategy, anyone can increase their profitability, and stay on top of their investments during trying times. Innovations in being able to invest through a purely digital platform with low barriers to entry may just be the prime solution for new and seasoned investors to explore.
