2020 won’t be a year to forget for some as the COVID-19 pandemic disrupted many lifestyles and brought about the cancellation of many events. But it’s also been hard for investors who saw the market take a hit early, and now hope it recovers as soon as possible. The good news is that while the bad economic times hurt some sectors like manufacturing, real estate, and oil and natural gas, it did open some opportunities for other companies. It’s possible to invest your money during a pandemic and ride through even a bear market.
Investing In Consumer Staples
As you might have recalled during the outset of the pandemic, certain items like toilet paper were being bought off the shelves in huge numbers. Fear and uncertainty can cause panic buying at times, and people will stock up on basic goods sometimes if they think they need to quarantine or avoid large crowds. Hence consumer staple stocks may perform very well at least in the short-term. Of course, you do have to be aware of companies who plan to shut down or limit operations for the safety of their employees, but when certain products are in demand, consumer staples can be a great place to invest.
Investing In E-commerce, Delivery, And Streaming Entertainment Companies
Since people may want to avoid shopping in person, or avoid wait times if the items they want are out of local retail outlets, e-commerce companies can be very important during a pandemic. Companies like Amazon have seen their stock rise as customers look to them to deliver key items. Around the world, businesses are also turning to e-commerce to acquire inventory as well as maintaining their supply chains. Along with Amazon, China’s Alibaba is doing quite well given high volumes of orders they have and their use of big tech and cloud computing. According to the experts at Money Morning, “In the fiscal year 2020, Alibaba brought in $72 billion, the most it’s made in a year. In Q4 2020 alone, it served 723.4 million customers.
E-commerce produced 80% of Alibaba’s revenue in 2020, but its other revenue streams are growing.” Along with the e-commerce companies, streaming services like Netflix and Hulu may also be big grabs because when people stay home during pandemics, they tend to binge watch online series a little more.
Investing In Healthcare And Pharma
Investing in the healthcare industry would seem to be a no-brainer during the pandemic. After all, people need medical services when they get sick, and they’ll need to buy medicines and buy from their local pharmacies you would think. Well it is true that there is opportunity in the healthcare industry for investing and hoping a pharmaceutical company comes up with a vaccine, you do have to watch out for bad investments. For example, some hospitals and medical research centers were prohibited from pursuing elective surgeries and other non-COVID-19 developments. Government regulations can affect some healthcare organizations and hurt some stocks. But other companies that make equipment like ventilators and masks are good buys.
The bottom line is there are good investments even during a pandemic, so don’t be too scared even when the stock market is volatile. When stocks take a dip, it can be a huge opportunity to buy in and later see your earnings multiply when the market recovers.