top of page

Top 5 investment themes for 2021

While decisions always appear obvious with perfect hindsight, the coronavirus pandemic has fundamentally changed the way the world operates. Looking forward we can simply be guided by recent events providing a greater awareness of market and consumer behaviour.

As a result, there are several key themes for the new normal heading into 2021:

Volatility - At the risk of stating the obvious, it is likely 2021 will continue to be a bumpy ride. With COVID-19 vaccines only just rolling out, new strains appearing, lockdowns and restrictions continuously tightening and easing around the world, stimulus optimism and disappointment, coupled with the unpredictability of a growing wave of inexperienced investors, it is difficult to imagine smooth sailing throughout the year. The point? Risk management is critical. Never lose sight of your portfolio weightings and tolerances.

Recovery - While it may be easy to focus on resilient stocks that can weather the pandemic, it would be remiss to lose sight of large opportunities that will come with a return to pre-pandemic operations. Sold-down sectors like energy, financials, media, travel, tourism, and REITs will likely be seen as the new growth as investors cycle away from the top performers of 2020.

Valuations - If there's one thing that 2020 proved, was that the economy is not the stock market. Ultimately some stocks come at a premium. Just ensure that expensive stock has a robust outlook to maintain the momentum. Digital transformations have accelerated in 2020 and while the investment community is well aware, it is one sector that is likely to continue to benefit.

Sustainability - While the merits and value of sustainable investing continue to be debated, it difficult to suggest that it is not becoming more important as companies commit more focus and effort on relevant initiatives.

Emerging technologies - With investors always looking for the next Afterpay, we see a greater focus on the trends that will define the future. While we steer clear of the pump and dump, micro-cap, flavours of the month... well-run companies, with proven technologies will certainly be on our radar. Industries to watch include telehealth, renewable energy and broad-based automation.

With due consideration to these themes, ultimately little has changed for the Stock Specialist thematic and objectives: strict criteria, diligent research, quality stocks, delivering market-beating returns.

bottom of page