Published On: Fri, Feb 12th, 2021

The Risks of Trading in 2021

We’ll start off with the good news: Things in 2021 are not going to be as bad as they were in 2020, regarding trading and investments in the markets. However, this doesn’t mean that this year is going to be smooth sailing on Wall Street and other stock markets around the world. Quite the opposite, a bumpy ride is expected, and a risky one as well.

Let’s try to understand why financial analysts are concerned about investors’ money this year. We’ll assess the main risks facing traders when making investing-related decisions, in order to try and understand how to avoid hazards as much as possible. Remember, though, that even the steps we shall mention here are no guarantee, so if you’re going to trade this year on the markets, do be extra careful.

photo/ См. ниже via wikimedia commons

Topsy turvy markets

In a sense, 2021 might even be rougher on investors than the COVID-19 stricken 2020 was. In 2020, we felt a definite slowdown in almost all trading venues, which made us more cautious with the way we handle our money. In that sense, volatility wasn’t such an issue, since traders were loss-cautious from the minute they understood the impact of the pandemic on economies.

We are entering 2021 with a feeling that all of this is behind us. Mass vaccination is already taking place all around the world, and economies seem to show signs of bouncing back. However, this may just be an illusion since the virus is far from gone – and its economic effects as well. Being too carefree with investments may lead to bigger losses, in the case of another wave of the disease, with new and harsher restrictions. 


If you like to trade from the comfort of your own home, you surely know by now that the online trading world is filled with bad people, who promise you a lot but disappear with your money when it’s time to deliver. Bitcoin scams are not surprising, as are all the other types of frauds related to online trading.

However, 2021 is projected to be a peak year for the cons. Toward the end of 2020, we saw a surge in the commonness of these activities, due to the fact that a lot of people had turned to investing as a source of income in hard times. You can be sure that the crooks are always improving their methods, making tracking them down more complex. That’s why you should always be wary of them – but you should especially take care this year.

A revolt against Wall Street?

Don’t underestimate the importance of the GameStop short squeeze events, and their possible effects on Wall Street in the future. Reminder: What started out as sort of a spoof on a Reddit feed, when users decided to buy massive amounts of a stock which was dropping (therefore raising its price back) ended up with hedge funds and big investors losing billions of dollars in a matter of days. This is more than just a ploy, drafted by a few tech geeks. It may have started out that way, but it has turned into a full-out protest against the way things are done in Wall Street.

That’s why anyone with a portfolio which includes stocks, indices, or bonds – even if it’s not in large sums – should be concerned. This could easily turn into a routine and a practice of sabotage against stock markets. It’s hard to know when it’s coming and be prepared in advance, so investors need to keep an eye out. This is not a reason to abandon Wall Street, but it is a reason to be extra cautious.

Bottom line

There are enough good reasons to invest with care in 2021. However, this does not mean that investors should keep their money in a safe instead. The markets are going to keep being one of the most prominent investment venues this year. Dangers can be avoided with caution, and consulting experts before moving your money around is never a bad idea.

Author: Lee Sadawski

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