Every month, I will give my take on investment trends going into the next month and for today, we’ll take a look at five investment trends to watch going into February.
It was a busy January that started with high hopes before crashing down thanks to the coronavirus outbreak in China.
By lunchtime on the last day of the month, the Dow lost all of its gains from the previous 30 days as investors remain cautious.
Now is a good time to explore potential trends for the next month.
Here’s a look at investment trends to watch going into February.
1. Safe Havens
As long as investors are skittish because of the spread of the coronavirus, safe havens like gold and silver will continue to gain traction.
Precious metals had a rough January as markets continued the bullish trends of 2019.
But as markets slide, gold and silver become more and more attractive.
As of Friday, both precious metals were up — gold had risen $14 to $1,587 an ounce and silver moved up $0.24, eclipsing the $18 mark.
Gold is currently holding above $1,580 and if the coronavirus outbreak continues to scare investors, that price will go beyond $1,600 in February. How long it holds there will be dependent on how long investors sell off equities.
Gold advancing is one of our five investment trends to watch going into February.
Bitcoin and Etherium have had a strong January, but I don’t see 2017 numbers coming anytime soon — Bitcoin jumped 2,000% that year.
Bitcoin moved above $9,000 in late January and Etherium moved above $179.
But the fact of the matter is cryptocurrency remains volatile. Many pundits believe Bitcoin could reach the $20,000 mark by the end of 2020. However, those gains will only be realized if crypto grows as a stronger alternative to traditional currencies.
For February, I can see crypto suffering the same back and forth it experienced in January. There’s nothing to suggest a huge breakout or shortfall at this point.
Continued volatility is one of our five investment trends to watch going into February.
As much as people want to see cannabis stocks grow, I don’t think it’s going to happen in February.
Until major money gets infused in the cannabis market, stocks are going to remain low. Companies like Aurora Cannabis Inc. (NYSE: ACB) and Canopy Growth Corp. (NYSE: CGC) won’t see any kind of breakout until the U.S. legalizes pot nationally or a larger company infuses money into the market.
That said, when and if either of those things happens, cannabis stocks should prepare for a big bounce upward.
A continued down month is one of our five investment trends to watch going into February.
4. Crude Oil
Both Brent Crude and West Texas Crude dropped to near-bear levels at the end of January.
Supply is lower and China’s battle with the coronavirus continues to raise big question marks as to demand.
Brent Crude was moving under $57 a barrel and West Texas Crude was below $52 a barrel.
Just the opposite of safe havens, as long as there is a worry in the markets over the coronavirus, I see oil prices continuing to fall into February.
Crude Oil prices falling is one of our five investment trends to watch going into February.
5. The Stock Market
Two things are going to dictate market performance into February: the coronavirus and the presidential election.
It’s hard to think that the equity markets will have the same rise as 2019 simply because it is an election year.
I believe that means more ebbs and flows to the market without much in the way of significant movement.
Once fears of the coronavirus pass, the market will move back up. However, gains will be tempered with any news regarding the 2020 presidential election.
Equity markets holding steady overall is one of our five investment trends to watch going into February.