Fred Razak, Chief Trading Strategist From CMTrading, recently arrived on South African shores to participate in a free trading seminar to enlighten ordinary South Africans about the potential online trading offers to generate additional income. The live workshop was hosted at the Da Vinci Hotel & Suites in Sandton on Thursday, 30 June. Razak shares some insights about the modern trading environment discussed at the seminar.

“We live in a highly volatile economic environment. The Russia Ukraine conflict is taking its toll on global economies. Unemployment is high, and the fuel price has skyrocketed. Plus, the US economy has contracted and is affecting global markets, and the Rand dollar exchange rate is fluctuating rapidly. Just because the data doesn’t necessarily reflect that we’re in a recession doesn’t mean we aren’t already in the midst of one.

“So many factors are adding fuel to the post-COVID economy structure. And millions of people are feeling the stress. But I worked on Wall Street during the global financial crisis in 2008 and have continued to trade on the markets during various booms and busts, and one thing I can say with absolute certainty is that during any crisis, there is always tremendous opportunity for those who can see beyond the dark times.

“Sometimes, it’s hard to see the wood for the trees. But it’s never a simple black and white case of good or bad. There is a far broader spectrum when it comes to the economy. Yes, some companies don’t rebound from recessionary climates. But there are also opportunities for new companies to enter the market. There will be chances to capitalise on businesses that ‘go on sale’ during the downturn. And ultimately, no matter what, markets always rebound – even if it isn’t immediate.

“There are positive notes in crisis if we know where to look for them. Having gone through the dot-com crisis in 2000 and the credit crunch crisis of 2009, then COVID, we can observe that history repeats itself. Markets will always boom and bust and then boom again. It’s a self-perpetuating cycle.  

“The current climate should not dishearten anyone looking to get into online trading. This is an opportunity to capitalise and look for the next upturn. It’s always important to remember that money never disappears – even during tough times. Money simply relocates.

“Similarly, if you ‘relocate’ yourself financially, you can take advantage of the markets. For example, gold is generally considered a safe-haven investment. So, investors will put their money into gold in a recessionary environment. Gold will then appreciate over time. And while other things may go down – for example, FAANG (Facebook, Amazon, Apple, Netflix and Google) stocks – there will be more opportunity in gold. The pendulum will always swing one way or another.

“If we examine the current state of Bitcoin trading and cryptocurrencies in general – which have seen a considerable drop in value recently – the demographics of precisely who has been investing crypto are important to look at. People from forty to fifty years old typically hold portfolios in blue-chip stocks because they are less volatile and growth orientated. This demographic is mainly concerned about their retirement and doesn’t want to take risks.

“Conversely, if you consider the twenty to thirty-year-old demographic, they are investing far more aggressively in cryptocurrencies. And in the next twenty to thirty years, this demographic will dominate the investment market. If they are already committed to cryptocurrencies, it could just be a matter of time until the world truly adapts to cryptocurrencies and uses them to transact every day.

“We will probably see a single cryptocurrency win the race into the global consciousness at the end of it all. But back in the present, the crypto boom and bust movement we have seen is entirely natural and organic for something so new. The world is not sure what to make of cryptocurrencies just yet. But that will evolve and the pendulum will swing once again.

“There is never a good or bad time to trade on the markets. Just as I believe in driving responsibly, I also believe in trading responsibly. If you educate yourself and are cautious enough to trade defensively when the environment calls for it, you can make a profit.

“I would never advise anyone to put their hard-earned money on the line unless they are entering the trading arena with practical knowledge of how the markets work. The best way to gain that knowledge is by partnering with a regulated, reputable trading brokerage that offers education, mentorship and user-friendly platforms to help you trade more confidently.

“Anybody can trade, even if you start small. You don’t need to be on Wall Street in the digital age. Online trading has become accessible to the average person, and any information we need is freely available. Adding value to your life and making extra income through trading is possible. Many normal people all over the world are doing it. And even in times of crisis, you can succeed if you trade responsibly.”  

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CMTrading is the brand name of Global Capital Markets Trading Ltd (A Seychelles company, company no. 104785)