The coronavirus pandemic that began early last year continues to haunt us, and economists all over the world are predicting that it may change the way that we live forever. In one sudden shock wave, our existence has been completely turned on its head, and a lot of us cannot help but wonder what happens next, and where we go from here.
Sadly, it appears that the days of traditional investing as we once knew it may be gone for good.
Imagine what could have happened if you had decided to go into the restaurant business just before the pandemic struck. You would have had to weather a protracted period without walk-in patrons, and your establishment would have had to survive solely by making food deliveries! Or, worse yet, think of what could have happened if you had decided to open a travel agency shortly before the pandemic began. You would have had to cope with a tidal wave of refunds, and basically be left without business for close to a year!
Owners of AirBnB facilities were badly affected by the lockdowns; and the owners of retail stores in the big shopping malls were similarly impacted. Gym owners and massage parlour owners suffered, as did many person-to-person service providers like nail spas, tattoo parlors, and make-up salons.
Establishments providing these services are beginning to recover with the easing of the lockdown, but the damage has already been done. Smart lenders have already begun to question the viability of financing such business enterprises in the foreseeable future, and it is not likely that any similar pursuits are likely to receive funding in the near future.
Companies to invest in this new year
As far as stock prices go, the shares of certain financial institutions, airlines, tour providers, and hotel corporations can be expected to continue taking a beating. These enterprises have had the rug pulled out from underneath them by government health regulators, and will definitely require some time to bounce back.
Healthcare and healthcare-related services, on the other hand, appear to be a sure thing. The major pharmaceutical companies involved in COVID vaccine development (such as Moderna, AstraZeneca, BioNTech, Pfizer, Takeda and Vaxart) are expected to make a killing from sales of their vaccines, and the services of medical-related and healthcare organisations are expected to go up in demand. As investment wizard Dan Peña says, “Anything that keeps old people like me alive is going to be worth investing in.”
Retailers and other service providers that mainly do business online are also set to make a killing — think Amazon, Shopify, eBay and Tesco. And while you’re at it, you may want to consider setting up your own Shopify or eBay store if you have a useful product or service to sell. You’ll need a reliable courier service to make sure that your physical products get delivered, of course; because of this, logistics companies that specialise in the movement of goods are also expected to have excellent business prospects in the new order of things.
Real estate
The suspension of university classes in 2020 and the consequent departure of many foreign students from Australia has created a surfeit of one-bedroom and studio-type dwellings previously occupied by foreigners in the CBD and its immediate surrounds.
While it may be some time before Australia can open its doors again to foreign students, it can and will happen in the not-too-distant future, at which time the demand for such accommodations may be expected to return. That said, now may be the best time to snap up such properties currently being sold at discounted prices, in anticipation of future demand. Investors who purchased these properties are currently bleeding from the loss of rentals, and many are eager to have these property investments taken off their hands.
There also appears to be a distinct trend towards larger homes located in the suburbs. People who went through the lockdown have come to realise that a bit of extra space goes a long way towards maintaining their sanity and staying comfortable, when forced to stay at home.
Getting ready for 2021
While it is gratifying to see that Australia appears to have the coronavirus pandemic under control within its borders at this time, it is instructive to recognise that the rest of the world is still struggling to contain it. This means that when Australia opens its doors to international arrivals once again, we could conceivably experience new outbreaks locally, and experience a return to stringent controls like the second Victorian lockdown of 2020.
The best course of action is therefore to remain vigilant and to be prepared — physically, psychologically and financially. Our personal health remains our greatest resource, so endeavour to preserve your personal well-being, and maintain a positive mindset. Exercise regularly, follow the Health Department’s guidelines, and try to avoid mob scenes. On the money side of things, always have some funds set aside for possible emergencies, and keep your insurance coverage up to date.
To be prepared for eventualities, always make sure to maintain an adequate supply of basic necessities at home, and keep your home secure, because when a crisis hits, desperate folk may decide to break into it if your house seems like an easy target. Keep your vehicle in good working order, too, in case you have to use it for emergencies. (The number of vehicles whose batteries went flat during the long lockdown is well documented, according to RACV.)
Remember that the world as we know it is changing forever, and we have to adapt if we want to survive and prosper in the new environment.
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(Roxanne Sarthou graduated from the University of the Philippines, Diliman. She is an Australian-qualified Financial Planner, Private Banker, Lending Manager and Property Investor).
