As you’ve no doubt heard (and begun to get excited about), life may once again be ordinary at some point in 2021. Evening Express quoted a vaccine expert, in fact, suggesting that by the second half of next year, we’ll have “normal life” once again. That’s going to mean a lot of wonderful things for millions of people all over the world. But it’s also going to mean that economies will begin to pick up again.
That specific aspect of the return to normal will also have a positive impact on millions worldwide. But how will it affect investment markets?
This is a difficult question to answer, because some aspects of the economic impact will likely outlast the virus itself. Even as world economies begin to pick up, consumer activity won’t rebound all at once, and some industries will prove to have been more permanently damaged. Additionally, once the virus is under control, we’ll remember all the other problems we have. In the UK, for instance, Brexit is already looming over the COVID recovery.
Basically, there will still be some economic uncertainty even as we move past COVID-19. That could make 2021 a more difficult year for investors than some have begun to anticipate in light of the vaccines. With that said however, there are some areas we would suggest investors keep a close eye on during this unpredictable time.
Markets That Thrived Mid-Pandemic
Not so long ago we identified ‘Profitable Investments to Make During a Pandemic’ with specific regard to a few areas that have thrived during COVID-19. Despite the narrative that businesses across all industries have suffered (and to be sure, many have), there have been some types of businesses that were well positioned to gain value as a result of the pandemic. We pointed to e-commerce stocks and real estate as a few examples of areas that actually saw growth during COVID. Others would include edtech stocks, certain medical and research company stocks, precious commodities like gold, and even cryptocurrency.
Not all of these markets and assets will necessarily continue to thrive post-pandemic. But many might. Conditions will not change overnight, and some of the societal adaptations we’ve seen may well linger into the future in support of these markets. For instance, many expect that consumers will continue to prioritize online shopping, and that education will remain at least partially remote — thus supporting ongoing strength in ecommerce and edtech.
Forex exchange is a different market altogether from your typical stock exchange, and so can make for a little bit more of an adjustment for those not used to trading currency. Nevertheless, FXCM’s explainer on opening a forex account shows that it’s a fairly simple market to get into. Those interested can fill out simple applications at reputable online platforms, choose usernames, open up accounts, and start trading.
As to why this might be a good strategy in the aftermath of COVID-19, it comes down to activity. Money is made in forex not necessarily because a given currency skyrockets in value, but rather because traders take advantage of enough small shifts and movements to grow net gains. And with different countries and economic systems set to rebuild at different rates after the pandemic, it’s possible that we’ll see greater variation in currency values than usual. A more active and varied market essentially means that there are more value discrepancies between currencies to take advantage of — and thus more money to be made trading one against the other.
Maybe most interesting of all is the idea that green energy companies and other companies relating to long-term sustainability will perform well in the post-COVID months and years. While not directly related to the virus in most cases, companies like these are expected to be part of a recovery effort that seeks not only to come back from the virus, but to use 2021 as a reset, and better society as a whole.
World Economic Forum’s piece on emerging market investment in the aftermath of COVID-19 referred to this as the idea of “building back green.” The piece stated that “in considering economic vitality” following the pandemic, “governments across the globe have touted green and digital as key policy priorities.” This may not mean a full, rapid transition toward green energy. But it is an indication of where the investments are going, and of one more market that is likely to thrive next year and beyond. Green energy’s time may finally have arrived.
None of these tips represent sure things, and you should of course assess the markets carefully before making any investment. For those wondering about post-COVID opportunities though, these are some to watch very closely.