After a chaotic year in 2020, investors are looking for ways to find the best possible returns in 2021. While it’s never possible to predict investment returns precisely, several trends are shaping up that may point to growth opportunities. Here are three of the biggest trends investors should be aware of going into 2021.
Travel and Hospitality Are Poised for a Comeback
Following one of the worst years they’ve ever had, companies in the travel and hospitality industries are positioned to rebound significantly as a COVID-19 vaccine becomes widely available. While this may not happen until the spring of 2021, investors can expect a major rebound of traveling and dining out when consumers believe it to be safe. Once this resurgence occurs, companies in these industries should see their share prices increase significantly from their current levels.
Renewable Energy Will Likely Be a Winner
Shortly after the beginning of the year, a new presidential administration headed by Joe Biden will come into the office and begin shifting governmental priorities in the United States. One sector that seems likely to profit from Biden’s policy agenda is renewable energy. Biden has made it clear that addressing climate change and pushing green energy solutions will be top priorities for his administration. Companies in the solar, wind, and hydroelectric power markets are, therefore, good bets for at least the next four years.
Construction Stocks Could Do Surprisingly Well
Another key plank of Joe Biden’s electoral platform was the rebuilding of infrastructure nationwide. Billed as a way to create jobs while improving America’s transportation systems, this infrastructure initiative is likely to drive hundreds of billions of dollars of revenues into the private sector. Among the key beneficiaries of this government spending will likely be the companies that manufacture materials and machinery for the construction industry. These companies could also benefit from private building projects as the economy begins to gain steam again.
Although nothing is ever certain in the world of investing, following these three trends may be the key to earning good returns in 2021. At the same time, it’s important to recognize that some stocks will lose ground as the pandemic draws to a close. Technology stocks, in particular, may be in for a rougher year in 2021.