The month of January is known for its highs and lows in the stock market, but for many, the best opportunity for increased market returns lies in the NASDAQ. With the global stock market currently on an upwards trend, investors seeking higher returns in the new year should be mindful of the many advantages the NASDAQ has to offer.
Despite its name, the NASDAQ is not an individual index, but rather a collection of about 3,000 stocks from the over-the-counter (OTC) market. Unlike the New York Stock Exchange, the NASDAQ is tech-oriented, typically featuring stocks from top technology companies. Also, the NASDAQ has flexible trading rules and does not rely solely on traditional market makers to facilitate trading. This means there are fewer restrictions on trading, allowing for fast stock movements and higher liquidity.
The NASDAQ’s history has shown that it has the best odds of strong returns over the long term. In 2019, for example, the average yearly return on the NASDAQ was 6.1%, with the S&P500 returning -8.0%. The performance of the NASDAQ has been steady over the years, suggesting the index is a safe bet for investors who cannot take high risks.
Therefore, for investors looking for better returns this year, the NASDAQ is an ideal option. However, just like any other stock index, it has its risks and investing in the NASDAQ still requires careful attention and strategy. It is therefore important to do sufficient research and have a good understanding of the markets before investing.
Whether or not investing in the NASDAQ is suitable for your financial objectives depends on a variety of factors. The key is to be well informed about the stocks or ETFs that you’re considering, understand the industry in which the stocks operate, and monitor the stocks’ performance on an ongoing basis.
It is therefore safe to say that the NASDAQ holds the best odds of gains in the new year. Investing in the NASDAQ is not a guarantee of success, but it offers an excellent opportunity for investors looking for higher returns. With its tech-oriented nature and flexible trading rules, the NASDAQ is sure to be one of the popular choices for investors in 2021.
