Saxo
Summary: Multi-asset trading can mean more opportunities and flexibility
When it comes to the markets, opportunity doesn’t only knock once. Every market brings multiple trading opportunities – and risks. Fortunately, there’s a way to both expand your trading opportunities and control your risk with one simple strategy: diversification.
Traders have a habit of finding a niche – often their home stock market – and putting all of their capital to work in one area. While it’s easy to stick to your home turf, it also means you could be missing out on trading opportunities in other markets just over the horizon.
Remember the summer rally in gold in 2019 or the recent spate of unicorn IPOs? Step outside your niche and you’ll find there’s always a bull market somewhere – potentially offering even better returns.
If you trade stocks, you can diversify by looking at different sectors and regions, or you can branch out even more with assets such as bonds, currencies or commodities. That’s exactly what the major asset managers do to maximise their returns and build strong portfolios. Wherever you venture, just be sure to do your research and stick to your overall trading plan.
As a trader, your most important job is not to catch the big moves or let your winners run. Your job is to grow and protect your capital. And with risk becoming the new normal, it’s critical that you build a portfolio that can withstand every headline, tweetstorm or economic announcement that the market might throw at you.
Controlling risk isn’t as daunting as you may think. When you diversify, you’ll also be implementing basic risk management. By gaining exposure to more sectors, regions and markets, you reduce concentration risk – being overly weighted in (and sensitive to moves within) one type of investment – and ensure your portfolio has the balance it needs.
Whether you choose “safe haven” investments such as government or corporate bonds or diversify into popular commodities like oil or gold, multi-asset trading can help keep risk in check – and put more opportunities at your fingertips.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.