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Which Kind of Assets to Trade in 2023?  

February 14, 2023
Crypto trading

The markets have seen lots of volatility since 2020 due to the uncertainty of the economic environment. From a potential recession to social trading impacts targeting certain businesses, there are more assets to consider today than arguably at any other point in history. 

Some assets, including interest-bearing products and high-yield dividend stocks, could put your finances in an excellent position throughout 2023. 

Are you looking for some ideas to incorporate into your strategies this year? If so, here are a few areas to review. 

1. Growth Stocks 

The benefit this asset provides when trading is some cushioning when the markets hit the wall of a sudden recession. Traders look for short-term solutions for quick turns, while investors seek the potential of long-term equity. [1] 

Tempting companies in this category are those that remain operational when the economy takes a downward turn. Focus on those with valuable products or services, even if the broader indicators seem negative.  

Growth stocks are found in most industries and categories, but they require frequent monitoring to ensure the results are what you expect. These tips can help you find the right solution for your portfolio. 

  • Purchase stocks with a solid relative performance line. The best options consistently outperform the market.  
  • Use timing strategies aggressively when the broader market is working with you, then be more cautious when it moves against you. 
  • Frequently trading can be beneficial with highly volatile stocks, but patience is also your friend in many ways. Try to play the short- and long-term odds.  
  • Cut your losses short. This step ensures there is enough capital available for you to keep trading. 
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Even when you have a winning stock, it’s important to remember to sell when it starts losing momentum. Many traders experience significant and unnecessary losses by holding onto their assets too long.  

2. REITs 

Real Estate Investment Trusts (REITs) are companies that finance, own, or operate income-producing properties across several sectors. This tradable asset is modeled after mutual funds.  

Although interest rates rose faster in 2022 than in nearly the 40 years before, the possibility of a 2023 recession means that interest rates could start easing. That means more borrowing power becomes available, creating more potential in this option. 

In past years, REITs have acted as an inflation hedge. Look for companies that own or operate properties in several industries for the best results. You’ll find several options, including hospitality, telecommunications, and healthcare. Those with diverse holdings are less affected by macroeconomic circumstances, allowing for continuous performance. [2] 

Even as people move away from urban centers, REITs provide a straightforward way to enjoy the benefits of real estate from a trading perspective. 

3. Compounding Options 

When inflation comes and a recession looms, consumers tend to hunker down with their finances and spend less. They tighten their borrowing and debt to avoid the high costs that come with those activities.  

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The solution to a bearish market is to put some cash into tradable compounding assets. Even if the growth is slow, you’ll still have chances to see positive changes while the markets recover. [3] 

If you’ve never traded this asset before, consider looking at zero-coupon bonds. You won’t receive interest payments, but you pay less than the bond’s face value to get involved. When the term is up, you get paid the face value. 

Another trading option is a high-dividend-yield stock. You can look at the year-over-year reports for payments to shareholders, the complete history of the business, and other data points to see what choices make the most sense for your situation. 

The high-dividend companies that see the most success are typically in the healthcare, industrial, or consumer sectors. 

4. Precious Metals ETFs 

Instead of purchasing precious metals to store, an ETF makes it easier for traders to put their funds toward something seen as more reliable during an economic downturn. You’ll have broad exposure to numerous choices at a reasonable expense ratio. [4] 

The benefit of an ETF over actual precious metals is the investment’s liquidity. It is much easier to trade this way than buying bullion or using futures contracts for the average trader.  

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Right now, 15 precious metals ETFs are available for trading in the United States. This figure excludes mining companies and those with less than $50 million in assets under management. [5] 

Finding the right assets to trade ensures that your current and future financial needs have the strongest foundation possible. Incorporate these ideas into your 2023 trading and investment plans to see what you can accomplish! 

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