Five market trends to watch in 2021
1. Dividends repaid
Due to the epidemic, several firms slashed payouts in 2020. Dividends should climb again in 2021. Because central bank interest rates are projected to stay low for a long time, dividend stocks will be even more appealing in 2021. PaydayChampion also has low-interest rates on their loans, so you may apply for one of them.
2. Covid-19 will be crucial again.
Covid-19 will be a prominent participant in 2021. It all relies on how swiftly and well the vaccinations are delivered. Still, as the Covid-19 mutation in the UK showed, the virus is unpredictable.
Companies like Pfizer and Moderna will win next year. Sanofi and GlaxoSmithKline will take until late 2021 to develop effective vaccines for older individuals. On the other hand, dozens of businesses are working on a vaccine.
Other less apparent winners: For example, transporting the vaccine will involve massive logistical efforts from businesses like Deutsche Post DHL, Bollor Logistics, Lufthansa Cargo, and Va-Q-Tec. Many logistical firms have already benefitted from the pandemic’s internet shopping boom and might gain much more.
Sectors that suffered in 2020 may rebound: If consumers can travel again, firms like Carnival and TIU, hotels like Accor, and airlines like Lufthansa, Easyjet, and Air France-KLM may benefit.
Commercial real estate may see some intriguing times ahead. The issue is whether working from home will continue. Corporations like Alstria Office may suffer if they require less space. Retail malls like Simon Property and Unibail-Rodamco-Westfield may face rent arrears and tenant bankruptcies.
3. Support for eco-companies
The White House will change under Joe Biden. Biden’s shift from fossil fuels toward climate protection and renewable energy will benefit environmental firms. This will likely boost shares and ETFs that fulfill ESG (environment, social, governance) norms.
Next year, there will be European elections, e.g., in Germany. Angela Merkel will not be re-elected, and the German Green Party may benefit greatly. This would affect energy and environmental supplies. Keep an eye on this subject as the European Union resolved to step up efforts against global climate change.
4. Women equalize the investment field
Males still dominate the stock market. Women are increasingly joining investing platforms quicker than males, the FT reports. At BUX Zero, female investor sign-ups increased six-fold yearly, while male investor sign-ups increased four-fold. I anticipate women will continue to invest more next year.
Related products include the Lyxor Global Gender Equality ETF and the MSCI Japan Empowering Women Index. These financial products may pique the curiosity of ESG-conscious investors.
5. FANG red flag?
Technology thrived in 2020. These equities are currently overpriced, in my view, and are subject to additional litigation. Several US states have sued Google for antitrust violations, and the US government has sued Facebook for the same reason.
One thing is sure: the financial markets will be lively and entertaining again this year.
