It can be tough to know which futures to invest in at any given time. With so many options available, it’s hard to determine which will give you the best return on your investment. We’ll look at the top four futures to invest in now and what makes them so attractive. We’ll also discuss some of the risks associated with each investment. So, if you’re looking for guidance on where to put your money, read on.
What is a future, and why should you invest in them?
It’s a contract between two parties to buy or sell an asset at a predetermined price and date. Futures are used to hedge against risk or speculate on the future direction of prices. For example, if you’re a farmer, you may want to lock in the price of your wheat crop now to know how much revenue you’ll have when it’s time to sell. It protects you from the possibility of prices falling in the future.
Futures can be traded on commodities, indexes, currencies, and even Bitcoin. They’re one of the most popular instruments for hedging and speculation.
The best futures to invest in
Let’s look at the best futures to invest in now.
Gold
Gold is seen as a safe-haven asset. That means that when uncertainty strikes, investors tend to flock to gold as a way to protect their money. It was certainly the case during the COVID-19 pandemic when the price of gold surged to record highs.
Investors were attracted to gold not only because of its safe-haven status but also because of the low-interest rates. With low rates, there was little incentive for investors to put their money in bonds or other fixed-income assets. Instead, they opted for assets like gold that offered the potential for higher returns.
Of course, gold isn’t without risk; the price can be volatile, and it doesn’t generate any income. However, for investors looking for a safe place to park their money, gold is a good option.
Oil
Oil is another commodity that’s attracted a lot of attention in recent months. The price of oil fell sharply earlier this year as the pandemic caused a collapse in demand. However, it has since rebounded as economies have begun to reopen.
Investors are bullish on oil for several reasons. First, the vaccine rollout is expected to boost travel and tourism, which will increase the oil demand. Second, OPEC+, the intergovernmental Organization of Petroleum Exporting Countries, recently decided to increase production, which should help keep prices under control.
US Dollar
The US dollar is the world’s reserve currency, meaning it’s used more than any other currency for international transactions.
Investors tend to flock to the dollar during times of uncertainty, and this is because the dollar is seen as a safe-haven asset. When investors are worried about geopolitical risks or economic turmoil, they often buy dollars to protect their money.
The dollar has also been benefiting from higher interest rates. The Federal Reserve raised rates several times over the past year, making it more attractive for investors to hold dollars.
Bitcoin
Bitcoin is a digital asset that’s often referred to as a cryptocurrency. It’s decentralised, which means it isn’t subject to government regulation.
Investors have been flocking to Bitcoin in recent months as a way to hedge against inflation. It is because Bitcoin is considered a store of value, which means it has the potential to maintain its purchasing power over time.
There are risks associated with investing in Bitcoin. For example, it’s a highly volatile asset, and any central bank does not back it. However, for investors looking for an inflation hedge, Bitcoin is a good option.
Conclusion
These are just a few of the best futures to invest in now. There are many other options available. And, as always, it’s essential to do your research before making any investment.
If you’re looking for more information on trading futures in Singapore, check out our other articles. And, if you’re ready to start trading, be sure to open an account with a broker that offers futures trading.
