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Despite the world’s fascination with the crystal ball, the future cannot be predicted. As the year 2020 proved, no one could foresee the massive havoc brought on by the unexpected coronavirus pandemic, much less predict the unceremonious downturns of global economies.
This is especially true for equity and financial markets. One simply cannot preempt the movement of stocks.
Instead, we can try to spot possible upcoming trends that may impact the markets for the good or the bad. And we can learn how to benefit from those trends. But the risk factors remain. As British actor Joanna Lumley’s character says in the iconic movie, The Wolf of Wall Street (2013): “Risk is what keeps us young.”
This year’s pandemic-battered stock markets held a few lessons. The flow of federal spending changed, and investors followed suit.
As investors gear up to brave another year, uplifted by the ongoing vaccine campaigns across the country, here are a handful trends we think might hold the stock markets’ attention in the future.
1. Green Stocks
Going green is the next big anthem for global economies. From electronic vehicles to lithium batteries, green stocks delivered an eye-popping growth in 2020.
Year 2021 is likely to be no different. With the Canadian government pushing for measures against global warming, investors have their eyes on green stocks such as GreenPower Motor, Lithium Americas and many others.
We are also likely to see the rise of renewable energy stocks as companies aim to reach zero-net carbon targets and consumers become more conscious of their choices. The International Energy Agency has already claimed that solar power will be the “new king of electricity.” Consequently, solar energy stocks and exchange trading funds (ETFs) have yielded good returns throughout 2020.
Battery tech is another disruptive field that should be tracked by the investors. From silicon to lithium-ion and biodegradable to saltwater batteries, the race for better and more efficient battery tech in currently underway.
@Kalkine Image 2021
2. Tech Stocks
Tech companies became the saviors this year amid a pandemic-caused homebound economy. Propelled by innovation and need to be ahead of the times, these stocks will continue to play bigger roles in our future economies. From supporting remote office work to AI, data and space science, tech companies will be the backbone of most organizations in the future.
Moreover, most tech companies are a part of clean tech stocks due to their low carbon emissions, a fact that has traditionally attracted ESG investors.
Things that we can imagine in the immediate future are the rapid expansion of e-commerce platforms and allied companies, automated and drone deliveries, logistics firms moving the online orders and so on.
3. Healthcare & Pharma Stocks
One thing that 2020 has proved, is that we can no longer afford to ignore research and innovation in medical science and allied fields. There is also a shift towards value-based healthcare past year, where business models focus on delivering higher quality care at lower costs.
As more venture capitalists fund research and development that helps humanity overcome health-related challenges, investors, too, will flock to firms showing positive results.
