How is the 2021 economy going to perform, and what stocks should you be following in 2021? The key themes here, of course are coronavirus and the international vaccine rollout and the companies affected by that, and of course Biden and his particular policies, eg. Green energy.
2021 has already seen a greater volume of trading in stocks than any year preceding. Things are certainly getting exciting in the stock markets in 2021.
In retrospect, you might be kicking yourself for not investing in delivery companies, eCommerce and streaming entertainment at the beginning of the pandemic.
Certainly seems obvious now. Yet, we have now all learned a thing or two about how a global pandemic plays out economically.
So let’s not make that same mistake again, let’s think outside the box and try to understand which sectors could do well, based on what 2021 will brings.
What should you keep in mind as you get ready to follow your favourite companies’ stock shares? Here are some general observations that might help you stay informed and make at least a little bit of sense out of the chaos.
Some Corporations Got Lucky
No matter what happens, there are always those who seem to have luck on their side. Such was the case with a handful of large companies when the pandemic came along.
They so happened to be in the right place at the right time, even though no one could have predicted it or planned for it. An example is the home delivery and fast-food sector.
When most of the world’s largest cities were under lockdown and millions of people were afraid to go to supermarkets, delivery companies soared. Never in their wildest dreams did the owners of these firms think that something as negative as a worldwide pandemic could propel their fortunes to such great heights.
Other organisations that were perfectly positioned to profit from the pandemic were sellers of retail healthcare goods and health companies in general. In the early days of the virus after it began spreading from Wuhan, China, consumers flocked to online stores to purchase disinfectant, vitamins, and other health-related supplements and cleansers. If you went long on those stocks, you probably did well.
Computer and peripheral sales also took off as many people began working at home and watching streaming services as their primary form of entertainment.
Additionally, companies that produce frozen meals and first aid kits saw profit margins rise from the early months of 2020. How will these entities do in 2021? Looking at Walmart’s warning about potentially weaker sales in the coming year, this might just give us a clue as to the coming year.
One thing is sure, and that is that certain trends that have kicked in over the last year, such as online shopping and education, and Zoom conferences and food deliveries are here to stay.
Since Biden became president a handful of sectors have flourished around his policies. These include the green sector such as EV makers, hydrogen and lithium stocks and the commodities that support them, such as aluminum and platinum and also infrastructure stocks. Also China, which is a massive consumer needs a huge amount of coal for a ll of its manufacturing, so the mining stocks should continue to do particularly well as well.
Some Stocks Were Already Positioned Well
The entire healthcare sector did well in 2020 but some parts were already positioned well and simply continued their profitable ways. Hospitals, for example, and the larger drug-makers were virtually unaffected by the worldwide illness except for a temporary upswing in profits.
The last three quarters of 2020 were also a positive time for e-commerce firms who already conducted their business online. Lockdowns, curfews, and the fear of leaving home had no negative impact on them. In fact, some e-commerce companies did quite well and are continuing to experience sustained profitability.
Looking forward in 2021, keep your eyes on any company connected to delivery services, at-home healthcare remedies, computer peripherals, and all tech and healthcare sector leaders.
They could be the most interesting to watch because it will be instructive to see if they continue to do well even as the pandemic hopefully comes to an end by summer as more and more are vaccinated.
A Few Were Hit Very Hard but Could Bounce Back
Who took the brunt from the virus? There were plenty of victims, almost too many to count. But when it comes to securities trading, that can mean a bounce after the big fall. So, what sectors and niches are going to be the most fun to watch?
For starters, look at the those who were hardest hit, like retailers, restaurants, and entertainment companies, with movie theatre chains a perfect example, which begs the question if it will ever return to normalcy, not to mention if there’s even a need.
They were trending down from mid-2020 onward. Why should you keep your eyes on them? Because we’re at some what of a turning point right now, with some cities letting up on social restrictions.
That might mean a big bounce for these organisations. On the other hand, if there’s another surge of the disease, or if COVID just hangs on for another year or more, there could be no change at all.
Get Started Today
If you’re interested in getting involved in stock trading at what could be one of its most exciting times in many years, open an account today and follow some of your favourite securities as 2021 unfolds.
There’s a lot happening this year already, from the slowdown of the COVID pandemic, major political changes, and global economic trends. Don’t miss out on the action. Once you open an account, you can begin trading immediately. If you are interested in trading stocks, now is the time to start.