The Russia-Ukraine military conflict began in late February and sent commodities and some currency markets into a highly volatile period. For investors who predicted that war between two major suppliers of the world's energy and other goods would open doors for potential profits, there was money to be made.
The same can be said of any crisis. The COVID pandemic began in early 2020 and is only now transforming into an endemic level threat to international health. But even in the depths of the lockdowns, new variants, and increase in case numbers, the medical sector posted historic gains. There's an old saying about the words crisis and opportunity coming from the same linguistic roots.
Whether the myth is true or not, the past two years have demonstrated that even in a crisis plagued scenario, with supply chain problems, health pandemics, wars, creeping inflation, rising energy prices, and other significant challenges, there is always an opportunity somewhere in the mix. For educated investors and traders who know how to spot trends and leverage their tools to earn a profit, volatility and crisis are two words that are not always unwelcome. The following events and scenarios are some of the possible occurrences that could offer even more opportunities for the remaining quarters of the year.
Ukraine-Russia War
When Russia invaded Ukraine in February, several international markets reacted almost immediately. For anyone who has experience trading forex through AvaTrade, the Russian national currency, the ruble, began a rapid downward move from mid-February until it finally bottomed in early March. Forex markets are an ideal example of how traders can usually find an upside in any situation. Making a profit often hinges on predicting near-term events accurately. When war rages, it's typically easier to accurately speculate about which commodities, currencies, and stocks will respond positively and which will respond negatively. The risk for investors who follow international crises like wars is that they'll guess wrong. However, the potential upside is considerable because currency values and stock prices tend to move rapidly and by a lot when war begins and advances into more critical stages. Look for the ruble to continue clawing its way back from an early February bottom as peace talks between the two nations continue to offer hope of a ceasefire.
COVID Resurgence
The worldwide COVID lockdowns and business interruptions were the death for many small companies. The ongoing risks for investors who held onto dying stocks were significant. The biggest opportunities during the pandemic were for day traders who speculated on which currencies and corporate stocks would rise and fall as the pandemic expanded and deepened. Healthcare companies saw massive profits, as did currencies in nations that were more able to weather the financial storm of the crisis. What should people be looking for between now and December of 2022? Even as the pandemic winds down, and if no fresh variants appear, the healthcare sector should continue to outperform others as demand for vaccines continues.
Global Inflation
When the year began, some of the world's developed nations were seeing the first signs of widespread inflation. Many thought it was a transitory phase, but it wasn't. Now, as nearly every country is witnessing inflation at its highest level and associated inflationary pressures, forex traders are watching the news carefully. As a general rule, inflation weakens a nation's currency. That's why forex traders always track the relative impact of price rises, so they'll know which currency will perform better than another. The risk is in miscalculation, but opportunities exist for those traders who enjoy analyzing economic data and making judgments about which of two currencies will be more weakened by domestic inflation.
Seesaw Stock Market
The stock market has been volatile in the last few months and could experience one of its most up-and-down years as 2022 unfolds. For day traders, scalpers, and those who prefer short-term speculation, volatility can be a welcome characteristic. As far as risk, it's critical for trading enthusiasts to use careful position sizing strategies and use tight stops when making transactions in these markets. If you want to know how to invest right now you need to have a firm grasp on the variants affecting the market. If the Russia-Ukraine conflict dies down and there are no new COVID variants for the next nine months, global securities markets could respond in a highly positive way. To make the most of opportunities in volatile, uncertain situations, it's wise to diversify portfolios, use smart money management, and know when to stay out of the markets. On balance, 2022 offers numerous opportunities for traders and investors in every market.