Investing in a Post-Covid Economy

Jun 1, 2021

As the world begins to recover from the economic trauma caused by the  Covid-19 pandemic, many are wondering where to invest what is left of their portfolios, discretionary income and rainy-day funds.  The dire straits of some industries left gutted by the paralyzing effects of Covid will offer opportunities for investors.  We’ve seen this happen in history and today is no different.  

The question arises, what stocks, industry sectors do one invest in and how can you be sure it is a sound prudent strategy? The US in on track for an economic recovery based on the $5 Trillion dollars spent in stimulus over the past year.  Banks are in better shape than they have ever been as a result of keeping interest rates low. Even if you factor in inflation as a concern, banks could still survive tighter monetary policy to offset inflation.  

The broader implication is there are unique opportunities in sectors of the economy that are poised to come back as people desire a return to normal.  As we approach the summer vacation season, look for opportunities in the travel sector.  Stocks related to this industry are at historic lows.  The strategy here is long term not catch and release.  The airline stocks are beginning to rebound and there are related industries, such as car rental, hotel and leisure stock plays that will benefit investors as well.  

It can be said, the hardest hit sectors will be the greatest opportunity for gains in the future.  In addition, the new frontier, that is sectors that grew as a result of the isolation and the need to reimagine work provide investors with many options to diversify their portfolios regardless of the size. 

Part of this new frontier is corporate wellness, health and safety.  This sector alone the global corporate wellness market size was valued at USD 52.8 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 7.0% from 2021 to 2028 according to Grandviewresearch.com.  This sector is ideally suited for investors looking to diversify with a focus on long term investments. As we get back to work, corporations are primed to invest in their “people” so any sector that helps will be an investment opportunity.  

Our economic recovery will be long and arduous; however, the impact of Covid-19 has opened the door to investment opportunities.  The pandemic is here to stay, which means the smart investor has a window to take advantage of underperforming stocks in sectors that have been hit hardest.  The strategy is simple.  Invest in sectors that will recover and look for buy and hold positions, particular to your unique appetite and risk tolerance.  History has a way of repeating itself.  Be a part of history…Invest and reinvest in both your portfolio and yourself. Both will benefit. 

 

Darryl Morris, CEO

Quantum International Trading, LLC

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