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6 Investment Themes for 2021

6 Investment Themes for 2021

January 08, 2021

The pandemic in 2020 accelerated some trends that were already in place and started some new trends. At Financial Journey Partners, we believe there are 6 significant trends that will occur in 2021 and we have positioned client portfolios in a way that we think will benefit from these trends.

Here are the 6 Investment Themes we see for 2021:

1. Remote Work

When businesses across the U.S. were shut down in March 2020, many people were forced to transition to work from home. We learned a new acronym, “WFH”, for “work from home”, as people said “I’m WFH”. Zoom became synonymous with teleconferencing, like Kleenex is for facial tissue and Xerox was for photocopies.

As the year progressed, companies figured out how to operate with employees working remotely. In the San Francisco Bay Area, non-essential workers are still required to work from home. Some companies have told their workers they can continue to work from home until later in 2021, into 2022 or permanently. This has resulted in some workers choosing to leave the cities to move to cheaper, less populated areas. “Zoom Towns” are forming where rural areas with high-speed internet are encouraging and enticing workers to move.

We think this trend will benefit teleconferencing, cybersecurity, and personal computer companies.

2. Cloud Computing

Remote workers have created a need for companies to move software and applications to the cloud so they can be accessed from anywhere. We see this as a benefit for companies that produce software and semiconductor materials used in the hardware for personal computers and data centers.

3. E-Commerce

The amount of goods purchased online has been increasing for years and the Coronavirus pandemic of 2020 increased the amount of goods purchased online dramatically. Many clients have told us they learned how to purchase groceries online and have them delivered to their home and plan to continue using this service when the pandemic is over.

We also see more businesses using online payment systems for convenience and requiring less personal contact between the purchaser and company employees. At FJP, we now complete all our forms electronically and much of the financial and real estate industry has made this same transition. 

4. Clean Energy

The automotive industry has seen increasing sales of hybrid and all-electric vehicles, and we see this trend continuing to accelerate in the years ahead. The major car companies are increasing the number of electric models they are selling.

Solar panels are getting installed on more homes and businesses. California has passed a law requiring that all new homes built in the state include a solar system for power.

The Biden Administration has stated that they will continue to encourage clean energy policies at the federal government level.

5. Biotech

The pandemic has highlighted the excellent work in the biotech industry to develop a vaccine in record time. As the vaccine rolls out across the U.S., this leaves us optimistic that things will improve in 2021 across the country. It is exciting to see that there are many newer, smaller, and lesser known biotech companies that are working on cures for cancer and other diseases.

6. Travel and Leisure

Government officials across the U.S. have implemented travel restrictions across the country to minimize travel to reduce the spread of COVID. People have had to cancel much of their travel plans for 2020.

We think that as the vaccine rolls out and after the cases of the virus drop significantly, people will likely feel safe traveling again. There could be an explosion of travel in the second half of 2021 and into 2022. If this happens, we think this could benefit hotels, airlines, cruise lines, travel agencies and ridesharing companies.

Investment Trends

We have included investments in client portfolios that we believe will benefit from these trends. Contact us if you would like to discuss this in more detail or talk about specific investments.