Pandemic Stocks Now and in the Future

Written by: Lee Sherman

As we enter into the second year of a pandemic that is still wreaking havoc, we can take a look back to see which industries did well in order to determine which might be winners in the future. Before you invest though, you’ll need to check with your financial advisor to determine what makes sense for your own portfolio. One thing we’ve learned after 2020 is never, ever, make any predictions!

At the beginning of the pandemic, there were shortages of essential products such as toilet paper and hand sanitizer which lead many to look at companies that produce paper goods and hygienic products. Meanwhile food delivery services (both groceries and takeout) emerged as popular categories. With all of us stuck at home, we turned to streaming services to keep us entertained. And what of the infrastructure that propped up all those video calls, virtual meetings, and computing in general?

Despite the economic downturn, there are many reasons to take a bullish approach to the stock market. In fact, the stock market has reached record levels as hopes that stimulus spending and widespread vaccination will turn the economy around. All you need to do is take a look at the tech-heavy Nasdaq Composite and the S&P 500 for optimism. Areas of growth include medical diagnostics, logistics, biotechnology and semiconductors.

A number of new technologies emerged during the last year or so and are poised for future acceleration. These include digital payments, telemedicine and industrial automation. The shift from carbon based fossil fuels to alternative energy will take years but now may be the time to get in on the ground floor.

Tech remains a bright spot

At the recent Consumer Electronics Show, the Consumer Technology Association (CTA) predicted that retail sales revenue for the technology industry will reach $461 billion in the U.S. in 2021 – a 4.3% increase year-over-year.

“Streaming services, 5G connectivity and digital health devices will push consumer tech forward in the year ahead as innovative technologies prove their resilience during challenging times,” said Rick Kowalski, director of industry analysis and business intelligence at CTA. “The industry’s ability to meet societal needs in a variety of circumstances will bring growth in 2021 as the world emerges from the pandemic.”

More people than ever are cutting the cord and enjoying streaming audio (music, audio books, and podcasts), video and gaming (which includes emerging virtual reality technologies). 2020 set records for laptop sales (enterprise and consumer) and the CTA is predicting laptop shipments will remain strong in 2021, reaching 69 million units (up 1% over last year and earning $38 billion in revenue, down 2%).

2020 was a year in which Artificial Intelligence (AI) and Machine Learning Technology went truly mainstream, powering everything from smart speakers, cameras, and televisions to electric vehicles and robots. At some point soon, we won’t even refer to this as its own category as advanced Intelligence begins to weave its way increasingly into everyday life.

Investment in alternative forms of energy to combat climate change is also likely to be a mark of the new Biden presidency. While talk of a massive bi-partisan infrastructure bill dominated the last four years, not much happened. That could change now that the Democrats hold slim majorities in both houses of Congress. Ask your financial advisor about the iShares US Infrastructure ETF which has gone up by 17% just since the November election, as one example of many well performing funds.

Lee Sherman is a contributing writer to MyPerfectFinancialAdvisor, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.

Related: Is It Time to Trim Stock Winners?