The coronavirus pandemic had a great impact on our lives and affected many industries and businesses. People are now looking for new ways of making money in the current realities when the rules of the game have changed.
The demand for investment opportunities and financial advice has increased, especially among young people. The stock trading became much popular and the transactions in the widely used platforms increased by 300% when the millennials became interested in investing.
The investors who have less experience typically start their career path from the passively managed funds and small investments. These can be the index funds or exchange-traded funds because they require less involvement from the investors’ perspective and these funds usually provide access to a wide range of stocks. One more benefit of the ETFs and index funds is the potential for long-term growth.
On the other hand, more skilled and experienced investors prefer individual stocks. Further, we will consider the industries that have great performance rate and provide perfect opportunities for investing and are expected to grow in the near future.
One of the industries that are showing good results and offering the investing perspectives is technology. With the shift to telecommuting, the demand for online services has rapidly increased. People are shopping online, using healthcare services, working, studying, watching movies, etc. The pandemic and lockdown gave a boost to the development of technology. In the past year, the sector showed the returns of 35.4%. In comparison, the average return of S&P 500’s comprises 8.7%.
The tech sector includes hardware and software companies. The hardware companies design devices like personal computers, smartphones, fitness trackers etc. The software companies design the cybersecurity software, operating systems, databases etc.
So, technology provides a perfect opportunity for short-term investing. However, there are predictions that the trend for digitalization will continue and the crisis increases the potential of the technological sphere.
Consumer discretionary sector
The other sector that shows the incredible results in terms of performance is the consumer discretionary sector. Food, retailers and entertainment companies belong to this sector.
The reason for the growth of this sector is connected to psychology. People started spending more money and consuming more products to feel relief in these difficult times when they are locked in their houses.
According to the statistics, the consumer discretionary sector will experience even higher growth in the next three or five years. The results would be shocking as the industry is expected to double the historical consumption growth rate. Due to this reason, the consumer discretionary sector provides great investment opportunities for a long-time perspective.
The healthcare sector has outperformed the market this year due to the obvious reasons. The industry is predicted to grow further as the companies will be producing the vaccine for COVID-19.
The healthcare sector, like many others, had shifted to remote ways of working. Also, it is expected that this sector will experience a range of innovations in the next couple of years. In addition, the healthcare sector is now growing faster in comparison to the global economy.
The most important healthcare stocks include:
- Medical device stocks. The medical companies make devices that include thermometers, gloves and more complicated ones like artificial heart valves.
- Drug stocks. The drug companies range from large ones to the smallest and produce drugs for treating various diseases.
- Healthcare providers. These are companies that provide healthcare services like physician practices or hospitals.
- Payer stocks. This type of companies includes pharmacy benefits managers and health insurers.
If you are going to invest in the healthcare stocks you need to consider the growth prospects of the company, evaluate the financial performance and estimate the dividend yields.
The energy sector is now showing the signs of recovery, as the investment experts note. This sector includes the production of natural gas and oil, distribution of petroleum products, coal mining and generation of electricity. This industry is often a challenge for the investors because the prices tend to change very quickly.
After the recent decline, the stocks of the energy sector have a strong tendency to recover. The decline was caused by the drop in the demand for oil as air travel and commuting was put on pause for some time. When the crisis ends and marketing conditions improve, the state of the energy industry will greatly differ from what it used to be earlier.
However, investing in the energy industry has a lot of risks connected with oil price fluctuations and volatility. So, before putting money in the energy market, you need to weigh the pros and cons.