Introduction
The COVID-19 pandemic significantly impacted various industries across the globe, and it felt like the Great Recession compressed into one year. We at 7i Capital, have learned a lot of lessons, and we believe the experience provided a lot of lessons for investors especially in 2021. Whilst predicting the future is a bit tricky, especially in this global pandemic, we still believe that certain sectors are great for investors to invest in.
No one could have foreseen the coming of the pandemic and the massive impact it has had on certain business sectors. At the same time, we don’t know what this year will bring, given that the COVID-19 global pandemic is getting worse in certain countries with the emergence of new coronavirus variants.
Here are the top five sectors for business investors in 2021.
Travel sector
The travel sector is one of the many sectors that is expected to jump up should the globe start returning to normal in 2021. The increase in demand for travel could drive an increase in the most affected airline stocks, cruise lines, and hotels.
Certain cruise operators such as Norwegian, Carnival, and Royal Caribbean have been hard hit by the pandemic and incurred huge losses in 2020. This kind of businesses had to struggle through very low revenues, which disappeared overnight after travel restrictions were announced and enforced by almost all countries. These businesses had to find funding to stay afloat. Once these vessels are allowed to sail again, they will not have a hard time filling them. Initial indications suggest there will be an increase in demand for voyages in 2021 and beyond.
There will be an increased economic activity for the hard-hit tourist destinations around the globe, and that makes the travel sector great for business investors in 2021 and beyond.
Hospitality
The hospitality sector is another sector that has been hard-hit by the global pandemic. Some restaurants have been operating a takeaway service for over one year, but many had to significantly reduce their service compared to the pre-pandemic period.
The hospitality sector may experience a sudden rebound in 2021 and beyond as consumers are allowed to dine out again.
In certain countries, restaurants have been allowed to reopen, and they have experienced an increasing number of customers going to eat out.
Financial sector
The financial sector could be one of the best sectors to invest in as the economy rebounds. Banks across the globe have reported a huge loss of revenues due to the pandemic as many banks projected massive loan write-offs.
As the economy rebounds, it is expected that the demand for credit products to increase, hence banks will lend more money to consumers thereby increasing their profits.
Retailers
Physical retail stores are one of the businesses that were hit hard by the pandemic. Those that had not invested in an eCommerce platform experienced a massive blow. Online shopping will continue even after the pandemic and business owners are actively transforming their businesses to online.
However, consumers don’t always buy certain items before trying them on first, such as clothes, so investing in companies with physical stores can yield good returns.
Construction equipment
As we recover from the pandemic, the world is trying to rebuild in the wake of huge economic stimulus plans. This will be of huge benefit to the construction sector leading to an increase in the construction equipment.
Conclusion
These are the top five sectors to invest in as the global economy returns to a growth trajectory. They will experience increased economic activity in 2021 and beyond. Investors should recognize impressive investment opportunities when they come.