Thematic Trading for Beginners

If it takes more than 10 seconds to explain a theme, then it is probable that it was never a theme to begin with. This is the main principle of thematic investing and what is certain is that this type of investing is sweeping the financial industry by storm. Over the next 5 years, likely you will hear more and more brokers offering Thematic Investing. It is one company though that is at the forefront of this trading revolution and here is why.

TRADE.com the European licensed multi asset brokerage house, in addition to its many other exciting, high probability products offers Thematic Portfolios. But before we learn about this product, let’s first understand why people would want to trade thematics.

Thematic Portfolios are more of a longer term approach to the markets then other trading types. Generally trading focuses on the here and now, with traders concerned over a pip here and there. Thematics though, focuses on a trend or an idea, something that may capture the hearts and minds of the investor. Examples of this may be meatless meats, which is now becoming a monster of a trend. If you had invested in this theme only a year ago, you would be smiling today. TRADE.com offers a selection of different themed portfolios and you will select those that resonate with you, or that you think will go on to perform stronger and stronger over time.

One of their portfolios is Robotics & AI, another Cybersecurity and a third and fourth Water Technology and Clean Energy. These are important industry sectors and they are becoming ever more important as time goes by. How do you know? Well simply take a look at the performance of Water Technology over the last year. It shows 32% growth in the last year. Will this kind of growth continue? That is up to you to decide.

So how can you invest in these key ideas? Quite simply, start by opening an account with TRADE.com Thematics. Verify your identity and then click on the type of portfolio you’d like to open. Here we have stuck with the theme of Water Technology and the image below shows you what the portfolio looks like. You have the choice here to stick with the default settings or to change the amount of units of each company stock inside the portfolio.

Remember of course to make a deposit into your wallet by clicking on the blue button you see above.

Here’s some tips to take on board when investing in Thematic investing.

1. Diversity is key when trying to manage risk. Choose a mix of different caps and sectors.
2. Remember small caps which are usually newer companies can bring higher risks as they need to develop further, but rewards here are generally greater.
3.  Try to evaluate the companies inside any portfolio by doing your homework before you open a portfolio, take a look at their fundamentals, their market cap and the equity summary score. Here Thomson Reuters StarMine can really help know a company’s strengths and weaknesses based on its performance. The higher the score the more attractive the stocks are considered.

To try Thematic Investing for yourself click here