The world changed dramatically in 2020, leaving many investors wondering what industries to invest in once COVID-19 has ended. For some ideas, read on…
With vaccines rolling out and many countries looking to open up again before easter, the coronavirus pandemic looks to be winding down in 2021. So, when the economy does open up once more, what industries should you invest your money in?
Whether you’re savvy enough to invest the money yourself, or have hired a private equity attorney to do the heavy lifting for you, you’ll need a basic understanding of the sectors worth investing in.
With this in mind, today we’re going to cover the top 10 industries worth investing your money in after the COVID-19 pandemic has ended. This way, you’ll have the best chance of seeing a return on your investment. Take a look…
Which Industries Will be the Most Lucrative Post-COVID?
Investing in stocks after a huge economy-shifting event like the coronavirus pandemic is the best time to do it if you want to see a large return on your investment. The following is our list of top 10 industries to invest in to maximise your future gains.
1. Pharmaceuticals
It’s looking like the pharmaceutical industry will be the one that manages to control the pandemic during 2021. With great victories comes great rewards, and the companies who created the vaccines, Pfizer and Moderna, will significantly increase their stock value.
However, it’s not only the companies who made the vaccines that will benefit from the vaccine rollout. The logistics industry will benefit from the increased distribution demand, as will companies who sell cooling technologies to keep the vaccines below freezing.
2. Travel
The travel sector might not seem like one worth investing your money in right now, that’s for certain. That said, once the economy opens up again, this is an industry whose stock prices are expected to make a big surge.
Airlines, hotels and cruise lines have all been in hibernation since the pandemic started, but they will soon wake up and prices will soar. It will also do wonders for tourist cities that have had to put their tourist economies on hold.
3. Airline Components
Speaking of travel, the airline industry is set to see a large increase in their stock price following the COVID-19 pandemic. To clarify, we’re not talking about the airlines themselves, we’re talking about companies who make airline components.
Planes aren’t profitable unless they’re full, and business travellers are more likely to continue with Zoom meetings until they feel safe enough to travel. Airlines are looking to save money and are more likely to buy aircraft components than new planes.
TransDigm, a company that makes aircraft components from lavatories to cockpits, and Hexcel, who specialise in carbon fibre for planes, have both seen their shares surge recently as the airline industry prepares to reopen its doors.
4. Chain Restaurants
As many sit-in restaurants have struggled to make ends meet during the pandemic, fast, casual chain restaurants are likely to return to normality. On the day Pfizer announced its vaccine had 90 percent efficacy, many chain restaurants across the US saw double-digit gains.
It looks like this could be an industry worth investing your money in, if the vaccine rollout has a similar effect on shares as the Pfizer announcement did. Also, in a recession, people tend to spend less money so a cheap, easy dining experience will likely win out over fancy sit-in restaurants.
5. Online Shopping
Even before the pandemic started, the shift from high-street to online shopping was already taking place. Supermarkets have been swamped with demand for their online services, Amazon has increased its value greatly, as have PayPal and other industries related to online retail.
The pandemic has accelerated the transfer, but it will by no means come to a stop after it has ended. In the UK alone, Boohoo have snapped up multiple high street retail brands, such as Oasis, Coast, Karen Millen and Debenhams. What’s more, Asos are in talks to buy Topshop, Topman, Miss Selfridge and HIIT to bail them out of administration and move them online.
6. Discount Retailers
The pandemic will inevitably lead to a recession once all the stimulus cheques, furlough schemes and business loans are taken away. To understand how people will spend their money in a recession, we need to look back to previous examples, such as the one in 2008.
The stock that proved the most lucrative in 2008 was Dollar General, which rose more than 60 percent that year. Discount stores were the only industry to come up twice in the top 10 best-performing stocks of 2008, with Walmart in 6th place.
With the recession reducing consumer income, they had to either substitute the products they bought for cheaper versions or decrease the amount they bought. Some items are absolutely essential to most consumers, and the stores that sell cheaper versions of them make large profits.
7. DIY and Repairs
Another industry that does well in a recession is DIY and repairs. When you can’t afford to replace something, your only option is to fix it yourself. In 2008 auto parts retailer AutoZone inc. and home and garden retailer Tractor Supply Co. performed exceptionally well.
With COVID-19 set to cause a future recession, investing your money in DIY and repairs could be the way to go.
8. Energy and Infrastructure
A climate plan worth $2 trillion in federal investment in the US under the new Biden administration is bound to cause a surge in the renewable energy sector.
Whilst wind and solar energy only account for seven percent of the world’s electricity today, the International Energy Agency has suggested the figure could rise to 40 percent by 2040. With increases like this, and a push for countries to ‘build back better’, this could be a sector worth investing your money in.
9. Banks
The market’s current comeback seems to have bypassed the four giants of financial services:
- JPMorgan Chase
- Bank of America
- Wells Fargo
- Citigroup
This has left their stocks so cheap that, when their profits rebound, investors could make a substantial ROI. A gradual economy should gradually lift rates and boost ‘net interest income’ meaning the banks will rise again once the pandemic is over.
10. International Industries
Investment stocks in the US have always traded at a premium compared to international stocks, but it seems that the tide is shifting. The dollar’s status as the global reserve currency and the stimulus spending from the feds that were propping up businesses could change once the pandemic has ended.
Investors are likely to grow more confident in Asian and European companies, and invest in them more heavily. One example would be Taiwan Semiconductor Manufacturing Co., which makes more chips than any company in the world and is integral to global 5G rollout.
If you’re looking to invest in 2021, try not to look only at US companies, and branch out to companies located elsewhere in the world.
Ready to Invest Your Money?
In this post, we’ve managed to cover our top 10 industries you should invest your money in once the coronavirus pandemic has ended.
Hopefully the advice shared in this post will be useful for your monetary goals. Just remember, it’s always good practice to keep your finger on the pulse in case any of these investment opportunities shift in the weeks and months to come.
Article Submitted By Community Writer
