The investing industry is changing faster today than perhaps ever before in history. It’s crucial for investors to stay up to date on the latest investing trends, including emerging buzzwords, if they hope to develop a strong investment portfolio.
While many changes are taking place in the investment world, here’s a look at the most popular emerging buzzwords for 2022.
Short for decentralized finance, DeFi is a term that investors use when describing cryptocurrencies and other financial technologies that allow financial transactions outside the traditional banking structure. It includes everything from Bitcoin to NFTs. Rather than using the standard banking system, DeFi uses blockchain to manage transactions.
Also referred to as nonfungible tokens, NFTs serve as certificates of ownership regarding digital assets, such as original videos, digital art, tweets, and memes. A blockchain system, working as a digital ledger, tracks ownership of these digital assets. In addition, investors can trade or sell NFTs to transfer ownership of any digital asset.
Inflation concerns are impacting nearly every region of the world. Financial experts, however, are referring to this as transitory inflation, meaning that it’s more of a temporary issue without any long-term effects. The belief is that today’s inflation is a result of supply-and-demand challenges spurred by the pandemic. The hope is that once supply can meet demands, inflation subsides, and prices return to normal. While experts are using the term "transitory," they also admit that it may take three to four years to see prices drop back down to normal.
A decentralized autonomous organization, more commonly referred to as DAO, is a type of internet community or entity that runs on blockchain technology. These communities or entities have no central leader, but rather, all members of the community manage it. Community rules are built directly into the blockchain technology, and enforcement is done through smart contacts.
Altcoin, short for alternative coins, is a type of alternative cryptocurrency that encompasses everything except Bitcoin. The most well-known altcoin is Ethereum, but other popular types include Dogecoin, Solana, and Cardano.
WallStreetBets is a Reddit community that people join to discuss and speculate about investment opportunities. Even though the group has no specific leader, community members have worked together to manipulate stock prices on popular brands, such as GameStop and AMC.
Fully understanding these new buzzwords can help investors make better choices in regard to their investment opportunities.