After a brutal month for crypto, stocks and gold in September, sentiment is beginning to change once again which could land us in another cycle of bullishness. But it's hard to decide where to put your money to get the best bang for your buck. Here are three ways you can tackle your investments this month:
- Buy the market that got beaten down the most
The US stock market fell well over 5% this month as the Fed kept sending us mixed signals as to whether or not they will taper or not this year. Global equities struggled as well which turned into a mostly risk-off sentiment. Bitcoin fell as low as 18% last month after fears of China's crackdown put more pressure on the coin. In my mind, it seemed that the turbulence in the stock markets were more justifiable than the sell off in crypto. We already knew China was banning mining and transactions, but price sold even further in September. So looking towards a big move to the upside in crypto could be the better play.
2. Go risk-off
Times are still highly uncertain and very unstable when it comes to monetary policy and market sentiment, which could lead you to believe that things will continue. This could be very true, and the economy could continue to suffer; we have seen several weeks in a row of missed jobless claims expectations and higher-than-expected inflation rates. If this persists, gold could start seeing more demand. Or if economic sentiment improves, the USD might see another rise from the expectations of tapering and raising rates.
3. Just buy everything (read below)
Some experts would argue that diversification is the best way to invest, and usually, I don't think so. However, price action in September took most everything down. So there could be a chance that everything improves; if we saw gold, crypto and stocks fall last month, then we might just see an improvement in all three markets. Two may recover less than the other, one may recover worse, but this sets you up for the best chances of at least one market rebounding well. US stock market goes up more often than not, gold goes through month-long swings in either direction, and crypto has the potential to give you thousand percent returns.
Either way, there's lots of ways to go about this other than these three suggestions, but I think it's important to consider these three way before you set your heart on going all in on one thing. Figure out which could be best for you and your investment strategy. And remember to practice good risk management!