What assets are worth investing in during the third wave of the pandemic
Over the past month, there has been an active increase in the number of people affected by the coronavirus. WHO Director-General Tedros Adhanom Ghebreyesus notes that this situation indicates the beginning of the third wave of pandemics in the world. At the same time, the number of lethal cases in Russia has recently been almost 30 times higher than in other countries. According to experts, the current situation will have less of an impact on financial markets than the two previous waves. However, investors should pay careful attention to the composition of investment portfolios during this difficult period for the economy.
Companies’ expectations
Software developer Megaplan conducted a survey among small and medium-sized businesses on the topic of “What period of the pandemic was the most difficult”. More than 50% of the businesses surveyed responded that the third wave at its current stage of development was less disruptive than the first. The results of the study are shown in the chart below.
More than 80% of companies plan to grow in 2021. Strategies of different organizations include conquering uncharted markets, expanding production, and launching new products. Most companies also have a plan in case the third wave of the coronavirus arrives. For example, more than 34% of organizations are going to build a financial safety cushion. Many companies plan to introduce COVID-19 testing, mask control, and mandatory vaccination of employees.
What assets should be included in the investment portfolio
Recently, investors have been attracted by developed-country funds. Their interest is based on expectations that companies from economically strong countries will adapt faster and come out of the next crisis. Investors are particularly attracted to U.S. and European funds. In the first case, IT companies from the USA get most of the attention. European funds are considered attractive for investment thanks to lower risks and relatively low asset volatility compared to emerging markets.
With the third wave of COVID-19 coming, investors should pay attention to companies in the following sectors:
· Information technology (Zoom Technologies, Facebook, Microsoft, Mail.Ru, etc.)
· Online commerce (Ozon, Amazon, Yandex, etc.)
· Energy (Gazprom, Lukoil, Rosneft)
· Metallurgy (Nornickel, Severstal)
Experts consider it advisable to compile diversified investment portfolios in the second half of 2021. According to experts, while waiting for the active phase of the third wave of the pandemic, one should not experiment and bet only on one economic sector. A balanced portfolio should consist of value and growth stocks. The first category includes dividend-paying organizations and the second category includes companies from the online sector.
Conclusions
Judging by the general state of the global economy, businesses are actively adapting to the new reality. Despite the positive trends in the market, investors should be cautious in choosing assets for diversified portfolios. In anticipation of the third wave of the pandemic, the best strategy is to invest in companies that are growing steadily.
