Interview – Finance Magnates Intelligence Report

Below is an extract from Charlotte’s interview with Finance Magnates Intelligence Report:

1. Big-tech companies lost significantly in 2022, and their shares tanked heavily. Could this have influenced a shift in favourite instruments among retail traders?

Yes, the top 10 tech stocks together lost a massive $4.6 trillion in 2022, with Amazon leading the pack, losing close to $856 billion in market cap or almost half its market valuation. In fact, FAANGT stocks alone shed a combined $3+ trillion in market value.

The turbulent year for tech has both analysts and investors anticipating an upcoming recession, which could spell more bad news for tech stocks, which have historically performed poorly during downturns. In addition, the ongoing layoffs and slowing growth has retail traders looking for more stable options. For instance, inflation beneficiaries have seen rising popularity.

Defensive stocks, such as consumer staples, utility and healthcare, also tend to be recession-proof, attracting retail interest. Plus, the energy sector surged 59% in 2022, driven by geopolitical tensions that sent oil prices soaring in Q1.

Of course, it’s important to remember that the tech industry is a multi-faceted one, including not just hardware and software but also e-commerce, social media, cybersecurity and more. So, specific sectors within the industry are likely to perform better than others, such as cybersecurity, automation, robotics and AI.

2. From the point of view of a marketing professional, do you see seasonality in the popularity of the various CFD asset classes that brokers and investment firms want to promote?

The past few years have been an exciting time for us as marketers in the finance space and we’ve seen constant shifts in trends.

One has been the rising popularity of CFDs across asset classes. Now, with a large percentage of retail traders being first-time market participants we’ve been focused on building top education centres and video support centres. In the commodities market, oil & gas tend to benefit from the onset of winter in the Northern Hemisphere. Brokers offering energy CFDs needed to keep their clients well-informed of this historical pattern before winter sets in. So, even before we reached October, we started talking about the rise in demand for oil & gas in the colder months and how that impacts prices.

Each broker has a different focus, and our tailored strategies incorporate their KPIs, asset focus and the content and the demographics they are targeting.

3. Which asset class might be the most popular in 2023? Will shares regain their popularity again?

Finimize published a survey in December 2022 of 2,300 retail investors across North America, Asia and Europe. The survey revealed that a vast majority of respondents expected the worst to be over for the stock markets by mid-2023. But I’m not convinced about sustained recovery this year, especially for US equities.

Conversely, the emerging markets are looking increasingly attractive. Firstly, emerging markets (EM) stocks are trading lower than their historical averages and the developed market stocks, with lower cyclically adjusted P/E ratios. Secondly, major headwinds facing the EMs are likely to abate but earlier than they do for advanced economies. If the US dollar continues to weaken going forward, it could benefit emerging economies.

China might also give reason for hope with its economic prospects improving by spring. The country is not facing high inflation or witnessing rising interest rates. So it could well have a good runway for stimulus measures to drive the economy. Any growth in China is likely to have a ripple effect on other Asian economies, as well as the rest of the world, especially in sectors such as tourism and exports.

On a final note, I would watch cryptocurrencies. Despite the crypto winter, digital assets have remained popular among retail investors. Bitcoin, for instance, was already up almost 42% YTD on January 30, 2023. And don’t get me started on meme stocks.😊

Finance Magnates Quarterly Intelligence Reports incorporate unique data on trading volumes and traders, in-depth insights, special guest articles, regional information, regulations, updates and much more. Charlotte regularly contributes on behalf of Contentworks Agency.

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