What counts as a real shift … or just a fad?
Which changes will last … and which will change back?
The pandemic has given us plenty of new tricks.
We’re working from home instead of offices. We’re connecting with teachers online instead of in classrooms. We’re having our groceries delivered to our doorsteps rather than making supermarket trips. And we’re having family events over Zoom as an alternative to traveling.
We’ve definitely learned to cope with the effects of COVID-19 on the world.
Businesses have, too. Companies are adjusting their physical store layouts to follow social-distancing guidelines. And they’re finding ways to accommodate increased online sales.
But positive vaccine news has given people hope that things will go back to how they were — before COVID-19.
So, when it comes to building your nest egg, it’s important to figure out which of our new habits will become lasting shifts, and which will fade away once the pandemic does…
Some Industries Are Doing Well … Will That Continue?
As I told you earlier this month, there’s been a surge in pet adoptions and fostering since social distancing started.
Pets are becoming more of a priority than ever. And more people becoming pet owners means more demand for America’s already-massive pet care industry.
Will that continue from here? Nobody knows for sure. (Though pets are very permanent parts of our households.)
We’ve also seen surges in cooking and baking at home. In fact, according to consumer research firm NPD, food preparation and storage equipment sales have soared. Compared to the same period — March to October — last year, sales have increased 41%.
But will we still be as obsessed with baking sourdough loaves once we’re safely able to go outside again?
This is where our new habits become trickier to measure. And it means that businesses not only need to continue to survive and thrive during the pandemic, but beyond it, too.
As we’ve told you before, we’re looking at a two-track future for our economy. And if you want your portfolio to be best prepared for what’s ahead, you’ll want to follow our lead into specific types of companies…
These Industries Will Continue Higher
We’ve already told you which companies to avoid: movie theaters, airlines, restaurants and retailers without online presences.
It’s a no-brainer: Some of them may survive the pandemic. But it’ll be tough for them to rebound.
Now, we don’t have crystal balls. Anyone who tells you they know 100% what will happen next is kidding themselves. All we can tell you is what the numbers tell us.
And they’re showing us that companies that are established leaders in health care and tech are prepared for whatever happens next.
They have the resources and ability to diversify and adapt to our current situation and expand their profits. But as dominant industry players, they also had reliable business even before COVID-19 hit. So, if things do return to how they were, they’ll continue to make money.
Think about huge tech tail winds like streaming, e-commerce and the Subscription of Everything. They were already growing before our world changed.
For example, while total retail sales growth decreased from 4.7% in 2018 to 3.4% in 2019 … e-commerce retail sales actually increased from 13.6% to 14.9%.
And the pandemic has forced people who didn’t adopt these technologies before to see how valuable they can be. We doubt they’ll exclusively go back to the old way of doing things now that they know there’s an easier way.
So, stocks in these areas will lead the way, no matter what our post-pandemic future holds. It’s a win-win. And if you want to get into their growth, there’s an easy way to do so today.
The Vanguard Information Technology ETF (NYSE: VGT) holds a basket of 330 top tech stocks in these areas showing strength across the board — like Adobe, PayPal and Apple.
As the two-track recovery resolves, we’ll keep updating you on the best ways to take advantage.
When this pandemic is over, we expect that many of the lasting shifts we see will be in technology. So, don’t let this trend pass you by.
Regards,
Managing Editor, Alpha Investor