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What Next for Crypto Investors? Motley Fool.

15 December 2022 14:59, UTC

Earlier this year, most advisors predicted a bumpy ride for investors for the remaining part of 2022. With recession to an anticipated market, crash stocks swung lower, leaving an indelible mark left by the Coronavirus. Nevertheless, history has proven time, and over that taking, a dip is part of the game. The stock market crashed several times before in 2000, 2008, and 2020, resulting in some huge losses.

When the bear market takes over, investors are left scratching their heads on whether or not they should make moves. The losses are massive for some, but it is reward season for others. As usual, most investors rely on Wall Street and reviews from prominent online advisors before making their next move. Despite the plunge in the market, there is always potential; thus, we look at Motley stocks to buy as the year comes to a close.

Investors understand there is a greater risk in laying low than in placing a bet on stocks. Financial advisors always speak about spreading the risk, which is the only safe alternative if you want to increase your risk tolerance.

As Matthew Frankel writes his top picks for stocks to buy in 2022, he highlights that there is no crystal ball to guarantee a positive return from them, but they indeed bear the potential. With so much information and thousands of publicly traded companies, it is common to hit a dead point on where to begin.

Therefore, it is vital to understand that your options depend on your financial situation. First, take your time to learn how to invest in stocks. Also, we couldn't emphasize enough the importance of diversifying your portfolio. Here is Motley's list of stocks you can buy now:

  1. Etsy (NASDAQ: ETSY)
  2. Pinterest (NYSE: PINS)
  3. Block (NYSE: SQ)
  4. Shopify (NYSE: SHOP)
  5. Realty Income (NYSE: O)
  6. MercadiLibre (NASDAQ: MELI)
  7. Intuitive Surgical (NASDAQ: ISRG)
  8. Walt Disney (NYSE: DIS)
  9. Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B)
  10. Amazon (NASDAQ: AMZN)

Our Top Picks for 2023

Historically, the year after mid-term elections comes with many goodies for investors. It may be thanks to the fervent efforts by the sitting government to boost economic growth in preparation for re-election. Whichever the case, it would be wiser for investors to take advantage of the opportunity to expand their portfolio.

Here is a roundup of lucrative market opportunities that could double your wealth:

1. Roku (NASDAQ: ROKU)

Everyone is on their devices enjoying the best of entertainment. It makes complete sense to tap into this market by investing in the most popular streaming platform. Roku is taking the entertainment space by storm, giving some big names like Netflix a run for their money. The platform enjoys a massive viewership in the U.S., Mexico, and Canada.

Although Roku had it slow in the current economy due to inflation, it still accounted for over 30% of the overall streaming time by the second quarter. Its closest competitor, Amazon, followed with 16% of the market share, making Roku a more robust first-place holder. Roku has seen the lowest valuation on its shares since 2017, trading at 2.3 times sales as we await a change in the macroeconomic environment; the potential growth positions Roku as a considerable long-term investment.

2. Block (NYSE: SQ)

Block is a cash app that helps people take charge of their expenses and allows them to complete different transactions via a single platform. So many people seek such financial solutions, creating a niche for investors to explore.

Despite the pressure, the application has withstood the worst of the market, enjoying a gross profit of about 37%. With such resilience and a potentially broader customer base, Block remains a significant contender as one of the platforms that could double its market worth in 2023.

3. Cloudflare (NYSE: NET)

Cloud services are here to stay for a while as more people seek these practical solutions. Cloudflare makes it to our list of promising companies on the market chart as it is a leader in the field of technology. In the third quarter of 2022, the company recorded an EPS OF $0.06, which exceeded the expectations of many. Its diversified business model exposes it to higher growth rates in providing crucial solutions areas like edge computing, content delivery network, and security. The company's growth curve reaps from that, earning its place among the most promising stocks.

More Options for Crypto Investors?

You will notice that our list did not cover any crypto stocks. To diversify their investment portfolio, crypto investors must open their wallets to more non-crypto stocks. Generally, cryptocurrency investment is a controversial topic. While Motley's fool does not shy away from the conversation, spreading the risk should always be top on any investor's priority list.

With so many new entrants to the market, eyes are on Ethereum-based cryptos for 2023. Since its launch in 2015, Ethereum has become the second-largest and most popular cryptocurrency. Developers have moved swiftly to develop some of the most competitive tokens, including The Sandbox(SAND) and Shiba Inu(SHIB) –an alternative to Dogecoin(DOGE).

Thanks to the rapid growth rate, cryptocurrency investors always have more options. The number is rising by about 1000 new currencies every month. However, not all of them are worthy endeavors. It is wise for investors to remain selective as most of them are aimed more at making money for the developers than anything else.

Is it the Right Time to Invest in Cryptocurrency?

There is never a 'best time' to invest in cryptocurrency. The right time is when you are ready and can afford the risk that comes with it. Remember, the golden rule for investing is to use only what you can afford to lose. Cryptocurrency profiles as a high-risk investment option; thus, the rule must apply.

We acknowledge that the crypto market is relatively new and untested. A lot has occurred in the scene, especially within the last five years. For example, Bitcoin hit in 2018, recovered and retook the dip in late 2021.

Whenever the bear market phase takes shape, investors remain stuck in a 'wait-and-see' phenomenon. Eventually, some go into a frenzy to recover the lost coins, while others file for bankruptcy after huge losses.

This example should not scare you away from joining the blockchain bandwagon. You have probably heard of the term 'Buying the dip .'With the crypto market taking longer to recover, it is vital to understand what it means and why it could be a potent option for crypto investors.

Buying the dip has everything to do with timing. In this case, it is purchasing a cryptocurrency any time its value drops. There is no straightforward answer to whether or not this is a good idea. Although the returns could be overwhelmingly rewarding, the result could quickly go either way and wipe out all your wealth.

Before buying a dip, several things must go into consideration. First, you must determine if the crypto is on sale and, if so, find out why, as some are not worth buying. Buying cryptos when they are at their lowest is incredibly exciting, and it is a fantastic strategy to benefit from market inefficiencies.

Alternative Crypto Investment Strategies

Cryptocurrencies and blockchain technology, in general, are highly volatile compared to other investment options. Consequently, consider a different strategy to maximize profit from your crypto assets. It is inevitably crucial to do so now, given the recent falling trend in the performance of crypto assets. Here are some investment approaches to consider as you manage your crypto investments through scalping strategies.

Before we dive right into it, let us understand what Scalping means.

Scalping, otherwise known as scalp trading, refers to a short-term investment strategy to make small but frequent profits, thus generating a substantial profit over time. Like the cryptocurrency market, the scalping strategy is volatile and helps manage risk. Crypto investors can use Scalping to obtain the highest possible profits while minimizing the risk of crypto trading.

How Scalping works

Scalping requires traders to formulate personal trading systems to maximize profit. They rely on real-time analysis and a strict exit strategy to make the most quickly. The process is founded on the assumption that most stocks will make it past the first stage of movement but have an uncertain future. Other stocks make it past this stage while others don't, thus the need to make as many small profits as possible.

Since the goal is to increase the number of winners while sacrificing the size of the win, traders with more extended time frames risk profiting the least. More prolonged exposure increases the risk of running into an adverse event; thus, smaller frequent moves are ideal. Scalping is an excellent primary strategy for forex and crypto trading.

If you are a newbie, here are simple guidelines to help you achieve success in your scalping strategy.

  • Consider using a trading bot –Scalping can be very demanding as it heavily relies on speed and a lot of information. The process can be very time-consuming and highly susceptible to errors; therefore, an automated tool should come in handy.
  • Explore various scalping strategies- there are multiple strategies, and one may find one better. Therefore, you can invest small amounts while implementing different methods to determine which works best.
  • Seek opportunities to reduce trading fees- Scalping offers smaller volumes of profit and frequent chargeable exchanges; thus, it only makes sense to minimize charges to maximize the profit.
  • Choose the most suitable trading pairs- Assets on the crypto market differ in prices, capitalization, trading volumes, and popularity. While selecting trading pairs, consider their volatility and liquidity.
  • Select a suitable trading platform- aside from an excellent reputation, look for one that supports your trading pairs.

The year is drawing to a close, and investors are to make their next moves as early as now. Although the economic shakeup did more harm than good, it triggered some level of resilience and a wiser lot of investors. As you try to balance between the types of stocks, remember to weigh your investment ambitions with your risk tolerance. Spread the risk as wide as possible with flexible strategies to cushion you just in case the market takes longer to pick up in 2023 or worse in the event of another crash.