Whether you have a seasoned investment portfolio or you don’t even know what investment means, 2020 has left most people wondering what’s in store for the investment market. Despite some dark predictions, the economy seems to be less affected by the pandemic than what was originally foreseen.
Understanding investment statistics can be a valuable asset, even if you aren’t that interested in investing. It can predict what to expect from the financial market in the coming year and maybe even help you make some extra savings for your retirement or kid’s tuition.
Here is our list of must-know facts about investment from the year 2020.
Investment Facts and Statistical Highlights: Editor’s Pick
- Because of factory shutdowns, the COVID-19 pandemic could result in global FDI shrinking by 5%-15%
- In 2019, the U.S. invested $55.5 billion in renewable energy
- The U.S. had a 2.26 FDI confidence index score in 2020
- In 2020, angel activity was just 6% weaker than in 2019
- There were 50 major robot tech investments in August 2020
- The market for worldwide real estate investment will expand to $2774.45 billion by the end of 2021
- In 2020, global FDI decreased by 50%
Angel Investment Statistics
An angel investor is a private investor that contributes to small startup companies in the beginning stages of business. They provide either one-time or ongoing financial support in exchange for equity shares.
Angel investors significantly impact the economy as they help new businesses get through the difficult early stages of having a company. Their activities can also be a helpful indicator for the health of an economy, and in the face of a global-pandemic, angel investments barely stuttered in 2020 compared to the year before.
1. Angel activity in 2020 was only 6% weaker than in 2019.
U.S. statistics on investment showed that in 2020, angel investment barely dropped. While many feared that the pandemic would cause a global recession, it’s entirely possible that the creation of a ‘new normal’ by this crisis spurred many innovative entrepreneurs to invent new initiatives.
Good businesses meet a need or demand from the population, and the coronavirus created an onslaught of new needs, especially in the areas of healthtech, fintech, and ecommerce. Angel investors contributed $2 billion to startups in 2020, showing that despite the challenges, the economy may handle this new normal quite well.
2. Seed stage and series A investment funding rounds were worth $6 million in 2020.
According to U.S. business investment statistics, this valuation is down from the year before, as many angel investors in Q1 and Q2 took a sitback-and-watch approach to the first stages of the pandemic. Ultimately moving into 2021, however, these valuations are recovering, especially in new booming industries such as cleantech and ecommerce.
3. The U.S. spent $12.4 billion in venture capital investments in 2019.
As we can glean from venture capital investment statistics, the country stands head and shoulders above other nations in regard to venture capital. Despite being impressive, however, the 2019 figure is still about a $5 billion downgrade compared to 2018. You can see 2018 as a bit of an outlier year, however, peaking in its 4th quarter. In comparison to 2017 peaking at $14.8 billion, VC in the US has been holding steady.
World Investment Statistics
Foreign direct investment (FDI) refers to the investment of an individual or firm in a company in a foreign country. It implies that the investor doesn’t just simply hold equity in the business but owns a significant portion or possesses major decision-making power.
4. Global FDI decreased by 50% in 2020.
Foreign direct investment shrunk dramatically in 2020. In Q1 and Q2 in particular, FDI amounted to $364 billion, and according to foreign direct investment statistics, it reached the lowest value since 2013. Much of this decreased flow was from investments into the United States and withdrawals from Switzerland as well.
5. Due to factory shutdowns, the COVID-19 outbreak may result in global FDI shrinking by 5%-15%.
The coronavirus pandemic is leaving a wake of economic disruption around the globe, and the manufacturing industry is hardly an exception to the rule. Manufacturing investment statistics tell us that factory shutdowns and sector downfall could noticeably weaken the industry that contributes to around 16% of the U.S. GDP.
The electronics industry is suffering the most due to the vast majority of production being based out of China (namely, smartphone and TV electronics), as many countries turn domestic for their manufacturing needs.
6. The worldwide real estate investment market will grow to $2774.45 billion by the end of 2021.
As with virtually every industry, real estate investment statistics show that in 2020 the global real estate market dropped to an estimated $2687.35 billion. This market is gradually growing, showing a CAGR of 3.2% in the 2020-2021 period.
The shifts in organizing operational costs around COVID-19 are predicted to cause more remarkable growth by 2025. This market is estimated to reach $3717.03 billion by 2025, ascending at an 8% CAGR.
Domestic Statistics on Investment
7. The United States had an FDI confidence index score of 2.26 in 2020.
When it comes to investment in the United States, foreign investors remain stable. The U.S. has sported the highest FDI confidence index in the world for eight years in a row since 2013, despite global uncertainties.
Canada is a close second, with an FDI confidence index of 2.20 according to recent investment facts, raising the global rankings from 3rd place to 2nd.
Generally speaking, confidence in investment is increasing in 2021. Around 24% of investors felt optimistic about the global economy in 2020, while almost 40% felt good about 2021’s economic situation.
8. The United States invested $55.5 billion in renewable energy in 2019.
While it’s still not the world leader, The U.S. put 27% more funds into renewable energy in 2019 than it did in the previous year. Global renewable energy investment statistics demonstrate that China takes the lead with an $83.4 billion investment budget, with Europe and the Asia-Pacific region (without China and India) coming as runner-ups.
Europe, interestingly, has pulled ahead of the U.S., while the rest of the Americas (without the U.S. and Brazil) have invested around $12.6 billion collectively.
9. U.S. investment made up 21.4% of its nominal GDP for March 2021.
According to statistics for domestic investment in the US, at the start of 2021, the U.S used a little over 21% of its nominal GDP to make domestic investments, just slightly higher than the percentage in the previous quarter (20.7%).
Seeing that the average ratio is 22.5%, this quarter’s percentage falls a tad short of the mean. It’s also a sharp decrease compared to the figure at the end of 2020 when investment took up 22.028% of the U.S. GDP.
Other Fascinating Investment Statistics
10. In August 2020, there were 50 major robot tech investments.
(The Robot Report)
The emergence of robotics isn’t exactly a new industry on the market, but the interest in this remarkable technology is only picking up pace. Despite all the predictions and complications of the last year, it seems nothing can put a dent in this industry’s progress.
In fact, according to robot investment statistics, in August 2020 alone, the robotics industry saw 50 major contributions worth a total of $2.3 billion. This is a substantial improvement from an already booming industry, bringing $1.9 billion in the month before.
11. The average return on stock market investments is 10%.
Investment inevitably comes with a degree of risk, but on average, investing in stock markets yields a relatively predictable return of around 10%. This number doesn’t consider economic inflation rates, however, which according to financial investment statistics, reduces returns by 2-3%. Still, if you have savings to spare, investing even small amounts of money can help build your investment portfolio and even be a better option than a standard savings account.
12. In 2019, marijuana companies received $116.8 billion in investments.
The field of medical marijuana has gained significant ground over the last decade or two in the U.S. The legalization and decriminalization of its use in various states have effectively opened the floodgates for investors to “get in on the action.”
Most cannabis investment statistics point to this industry being on the rise, especially since marijuana regulation still needs to progress to make that growth steady and stable. As more states move towards legalization, this industry can seem to only increase in value.
13. The Corporate & Investment Banking division of JPMorgan increased its revenue by 46% in 2020.
The NYC financial giant is among the top players of investment banking in terms of revenue. It’sCorporate & Investment Banking department certainly seems to be doing well, as JP Morgan investment banking statistics announced a 400% increase in revenue since the pandemic began last year.
That said, some divisions haven’t performed so well, with the company’s Consumer & Community Banking department declining by 6%.
14. In 2019, Tower Research Capital LLC (Tower) paid $67.4 million for a market fraud scheme.
(Department of Justice)
In November 2019, Tower Research Capital LLC, a financial services firm based in New York, had to pay $67.4 million in combined monetary penalties, disgorgement, and victim compensation payments.
According to annual investment fraud statistics, that was the most significant corporate resolution that year for the Market Integrity and Major Frauds Unit. The company paid this penalty for defrauding the E-Mini futures contracts.
By ordering a bulk of E-Mini contracts thousands of times and then promptly canceling them before being processed, Tower made the appearance to investors that the product was in deep demand, illegally influencing the stock market.
15. Small cap companies raised a total of $6.1 billion between late March and May of 2020.
The COVID-19 situation has led many companies to raise fresh capital to cope with the minor recession that ensued after the first quarantine. Based on current alpha investment statistics, this has resulted in relatively good returns across most companies.
It was so beneficial for some that they recorded returns going as high as 73%. Interestingly, all small-cap companies that conducted raisings at a discount of 20% over the average have enjoyed positive returns.
16. The job market for personal financial advisors will grow by 4% in the 2019-2029 period.
Investment advisor industry statistics show that due to the aging population of the US, there is a growing need for financial consulting. As life expectancy rises, the number of people who need services will increase, accelerating the advisor sector over the next ten years.
The year 2020 came with a whirl of predictions and fears as the political and economic climate adjusted to a global catastrophe. In particular, the fear of a financial crisis was a big one. Yet, in many sectors both globally and on the domestic front, investment markets saw industries hold stable, some even being able to stimulate growth after the initial shock of mass-quarantines.
Learning about Investment statistics helps take the mystery out of investing and highlight ways in which markets have been resilient in the face of crisis, helping you get better returns for your hard-earned money.
People Also Ask
Generally speaking, investing is a solid idea when you have some money to spare and long-term plans in mind. The stock market is not as susceptible to inflation as cash savings, creating a realistic chance of making a profit on your investments.
However, there is never any guarantee that your investments will pay off. It’s ultimately a matter of risk management in an uncertain practice.
The advantages of investing are two-fold. First, it usurps inflation, which doesn’t affect stock markets as much as cash savings. Second, it can be a powerful tool for building wealth, from a small amount of savings to a large one.
It can also be a powerful tool for building wealth. And on top of that, it can help save on taxes since the funds you invest in are not taxable.
There are many different types of investments, such as:
- Bank Products
- Commodity Futures
- Security Futures
- Saving for Education
- Investment Funds
- Alternative and Complex Products
- Initial Coin Offerings
All of these broad categories come with their specific perks and drawbacks. Before deciding to invest in any of them, be sure you understand all the rules and features.
It’s important before beginning investing to establish clear goals about what you want to accomplish with your investment. Then, evaluating relevant data will help you determine the risk of your investment and how comfortable you are with it.
Investing your money can be a good way to earn more money. Though the risk of losing money is always present, your investments should statistically pay dividends if you play your cards right.
Things like stocks, bonds, or certificates of deposit offer returns on the money you invest in the long run. By accumulating these returns, you manage to grow your overall wealth.
There are a few principles that can help you make the most out of your investments.
For example, you should always invest as soon as possible after reviewing the market and making sure you know what you’re doing. You should also consider using automation tools to make your dealings more efficient.
Setting aside a portion of your savings is also a wise practice. That should ensure you don’t blow all the money you managed to get through good investments.
The difference between saving and investing is the risk involved in the two.
Namely, saving has practically no risk, making it perfectly safe. On the other hand, it also has low returns, and often the interest rate will not compete with inflation.
In contrast, investment lets you earn a higher return, making it potentially more profitable, although they come at a higher risk of losing your investment.
The 30-day rule serves to prevent impulsive investing. Rather than allowing yourself to make investments based on knee-jerk reactions, this rule guides you to put money into a savings account for 30 days and re-evaluate your investment.
If you still want to invest at the end of 30 days, you can do so with confidence.
According to financial experts, you should set aside anything between 10% and 15% of your yearly income for investment. This portion is the optimal blend of low-risk and substantial profit. As such, the odds of your investment endeavors paying off are very good.
Over time, the disparity between the returns on investment and the money you can save will become more apparent.
All the available investment statistics point to ending up with more money than if you had just saved it.