Popular Investing Trends in 2021

Posted July 1, 2021 by in Lifestyle

What are the most popular investing trends for the year? It’s hard to choose a number one, but there are certainly several candidates out there. For instance, social investing has been growing in popularity for the past three years, so it’s hard to say if 2021 is its peak.

Likewise, various styles that have been around a long time are starting to come back into fashion. Among the newcomers, copy trading and pandemic-related strategies are both trending upward among younger investors who spend time on social media and are always open to new ideas.

In no particular order, here are four of the most relevant, trendy, and popular trading and investing activities for 2021:

Social Investing

Anyone who spends a few hours per day on social media is bound to run into the huge groups of social traders. They began in chat rooms for stock market enthusiasts a few years ago but have since taken up residence on the largest platforms, like Facebook and Twitter. What do they do? By combining knowledge, funds, and sheer numbers of investors, they purchase large amounts of stock in a single blow, often affecting the price in a way that they’d never be able to do alone.

So far, these groups have side-stepped government regulation. But, given the fact that many entrenched powers despise the concept of social trading, look for a coming clampdown in terms of laws and regulations.

Short Selling

The very act of making a contract to sell what you don’t already own is a non-starter for some people. Someone who sells 100 units of XYZ stock and then buys the shares back on the market the next day or month, is in a risky position. If prices shoot up, you have to fulfill the contract by purchasing assets that are much more costly. Regardless of the risk involved, the advent of widespread, easy online trading has been a benefit to short selling. Some people specialize in the technique and look forward to down-trending markets.

The Short Squeeze

When traders who have sold short get caught in a scenario where prices unexpectedly begin to rise, they’re said to be in a short squeeze because they have to hurry out and purchase shares to cover their obligations to buyers. These short squeeze stocks might rise in price so much that the short sellers take a massive loss on the transaction.

Copy Trading

Copy trading is often confused with social trading, but it’s really a type of social trading rather than a synonym for it. When you sign on to a brokerage platform that allows you to directly follow a leading, often very experienced trader, you are engaged in copying that person’s activity, trade for trade.

For those new to the securities markets, this is one of the hottest trends going. One of the main advantages is that it costs nothing to copy, and you can choose among a number of different experts as your leaders. Even those who have been buying and selling stocks for several years have latched onto this interesting new way of getting involved in earning a profit from the stock market.