On Thursday, Ontario recorded its lowest Covid count since September. As the vaccine continues to roll out across the globe, it looks like Covid is officially on the way out.
The last 12 months have seen investors scramble to adapt their investments in a time of uncertainty. With the world reopening, investors are left wondering how to, once again, pivot their portfolios. Should investors now simply resume their previous pre-pandemic positions?
Not exactly. As we all know, not only is the world in general totally different now, but with the rise of meme stocks, cryptocurrency, and NFTs, the investing world has also evolved significantly within the last year. As a result, there needs to be a whole new approach to investing.
So, where should your investments head once everything has reopened? One of the first ways that you can adjust your portfolio to a world that is slowly returning to “normal” is by investing in the things that people held off on during the pandemic. Canadians saved a record amount of money by holding off on vacations, new wardrobes, and dining.
So what will the masses be splurging on once the world reopens? According to MarketWatch, the same things that they’ve been deprived of all year long, and that is those that fall into the “consumer discretionary” category. These are purchases that are considered “non-essential” and can be postponed when things are tough—think stocks like Nike, McDonald’s, and Home Depot.
One ETF, in particular, that is solely dedicated to this niche sector is the Consumer Discretionary Select Sector Fund, aka the SPDR Fund (XLY), which has skyrocketed by 13% so far this year. Another way to invest in this booming field is through small-cap and medium-cap growth stocks.
Although investing in companies that provide non-essential goods is an ideal short-term investment, you might be left wondering what is poised to profit for the long term. One industry that has gained momentum from the pandemic is the cloud. As the world pivoted to work from home, companies needed to be able to access their work remotely. Big players like Amazon, Microsoft, and Google were sought out for their cloud services, and continue to be in high demand.
In fact, in Europe alone, by 2028, experts are predicting that the cloud market will be valued at $140 billion. Besides these obvious picks, investors can look towards ETFs like the Global X Cloud Computing ETF (CLOU), which is up 29% over the last year.
Whether it’s banking on the post-pandemic splurge on non-essentials or on new trends of technology, investors can be wise now to pivot their portfolio to include these sectors that are likely to see growth this year and for those to come.