Why invest in new-age metals with small-cap.
In 2021, the global economy was recovering and adapting to the new reality. Some directions, like air carriers, were coming back to the game very slowly; technology companies, on the other hand, showed high growth rates.
The companies from the Nasdaq 100 list, FAANG (Facebook, Amazon, Apple, Netflix, Google), vaccine developers, IT, and e-commerce are still on the fast track. On the one hand, the return to the usual way of life depends on them, on the other, the transition to a new stage of economic evolution. Next year they will continue to give, maybe not the highest, but stable dividends.
However, a few more interesting points for investment have been added. I would like to break them down for you.
Although gold remains the king of metals, I will tell you about those that have raised a lot of demand in recent years. These are lithium, aluminum, and magnesium.
Lithium carbonate is the cheapest and easiest source for the production of Li-ion batteries. The prices of lithium compounds are breaking records in the entire history and continue to rise. Manufacturers of batteries for machinery and vehicles require more and more raw materials.
This year, the global industry has
Prices for aluminum and magnesium skyrocketed as well. Most of all — because of the situation in China. The production of both metals requires huge electricity costs, and after the flooding in Shaanxi province, the energy crisis
Therefore, aluminum showed a 13-year high,
Metal imports to China are
Magnesium deficiency in the world,
The situation seems to be stable for now. Chinese factories resumed production in October and the price of magnesium
Last year, the capitalization of the semiconductor segment amounted to $426 billion, and by 2028 it will
Almost everything related to semiconductors is profitable. The exception is Intel, which temporarily dropped out of the microprocessor race after a change of leadership and got stuck in 10nm technology. In addition, since 2020, Apple has been transferring its desktops and laptops from Intel chips to its own developments.
AMD, for example, is already working hard on 7nm technology. AMD shares started from $92 at the beginning of the year and rose to $157 by the end. Tesla cars and Sony PlayStation consoles are equipped with AMD chips. They are also used for Microsoft Azure, Google Cloud, and Meta Oculus services.
But Intel isn't giving up. As the Nikkei Asian Review
Small cap companies
It’s quite simple: it is more difficult for a large company to grow, and your dividends from long-term investments in large business will be less compared to investments in a promising, but small company.
For example, the
But if under the same conditions, you were to invest in a small-cap company, then every dollar would turn into $42,000. By comparison, corporate bonds would yield only $300. Factoring out inflation.
Getting back to our reality, remember: at the end of February 2020, the shares of many technology companies went down dramatically, but after a month they began to rise again. For the rest of 2020 and throughout 2021, Nasdaq top positions have grown by leaps and bounds. For example, Alphabet shares have grown from $1,100 to $2,900 since early April 2020.
Most investors still continue to invest in large companies, but will soon switch to other indices. The most attractive small caps are monitored by several indices, the main ones being the
In early November, both indices climbed to record highs and are likely to continue to rise, as the overwhelming demand for shares in large projects has remained neglected. They are still cheap in an overheated market. Zacks Investment Research
It looks like next year the interest of international investment companies will be riveted on India. Morgan Stanley
Initially, Indian stock markets have outperformed other emerging markets over the past year and a half. Morgan Stanley
Next, while in other jurisdictions, such as the United States and China, the topic of raising corporate taxes is really hot, the Indian government, concerned about GDP growth, is taking measures to stimulate corporate profits.
And last but not least, the pandemic had a positive impact on the country's export potential, in particular, on the software outsourcing market.
The Collins English Dictionary, published by one of the world's largest companies, HarperCollins Publishers,
Blockchain is here to stay with us for a long time. Like its most famous project — bitcoin, which is the top cryptocurrency because it is the first, and the rest of the crypto appeared later. Conventionally, you can invest in modern hypercars, but the most expensive car still
Despite criticism, the price of bitcoin is constantly growing: having reached a capitalization of $ 1trillion, it is among the
Of course, bitcoin has problems. Firstly, it is not the most advanced protocol in terms of code. Secondly, bitcoin still exists, parallel to the modern financial system, and this situation is changing very slowly. Third, it remains a high-risk asset.
However, top crypto assets are gradually taking over the role of an alternative store of value. Among the owners of bitcoin are Tesla founder Elon Musk, PayPal founder Peter Thiel, investment bank Morgan Stanley, TIME magazine.
My advice is still the same, that is to invest as much as you don't mind losing. Do not engage in synchronized jumps with sharp market fluctuations, but be ready to play long and feel periodic anxiety of your nervous system.
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