Curious to what sectors or stocks in specific people are investing in now in prep for coming out of lockdown/ recovering from covid.
Shorter term I would be looking at leisure and hotels. With restrictions being lifted people will want to get out. Again shorter term travel being restricted the hotels and leisure might trump Airlines and travel. The hotels could potentially see further gains from the mandatory isolation in hotels, having already seen price increase from this.
Edit: Any stocks out there linked with private testing for covid? With potential mandatory tests for entering countries, concerts etc I could see potential growth.
I think the dark horse will be health clubs & other health-related stocks. I expect a lot of people will be coming out of lockdown wanting to shed the pounds theyâve piled on, and fitness clubs/vegan brands/other health-related brands could be an overlooked beneficiary of the economic shift.
The sensible thing would have been to invest in the leisure sector in March. Though hindsight is 20/20, it seemed rather obvious to me at the time. I wasnât in a financial position to do so at that moment, but as soon as I was I grabbed shares in companies like Marstonâs and those in the commercial property area. As well as payday loan companies and such. Basically, things that had their business shutdown and are fundamentally unlikely to be at a large risk of going out of business. Cinemas also seemed obvious, so I grabbed as much of Cineworld as I could afford when they had their crash a while back. I got in at 25 pence and thatâs paid off quite well. Cineworld was riskier, but it seemed unlikely that Iâd lose every penny/that a deal wouldnât be arranged with creditors to keep them going in some capacity.
Though you absolutely could invest in such companies now, the fact that weâre now much closer to the economy reopening means the returns are likely to be smaller. In the long-term this may not matter to you, but if we take Marstonâs as an example, they were as low as something like 28 pence a share in March. I didnât invest then, but did get them at around 40 pence, I believe. The past isnât a reliable indicator of the future, but I believe theyâre likely to return to ÂŁ1.10 to ÂŁ1.30 a share. Theyâve not been much above ÂŁ1.50 a share for several years, so I think youâve likely missed out on the bulk of any short-term gains.
Due to my investments in April/May and a little after that, my portfolio (only comprised of dips due to Covid) is currently up 50% or so. A lot of companies in there are quite far from having fully recovered , too
There are of course other areas where you may well do better by investing now than I did. For example, my average on Amigo Loans is about 10 pence a share. Theyâre lower than that now. Thereâs of course no guarantee theyâll ever recover to the share price they were at pre-Covid, but Iâd personally be surprised if they didnât reach 50 pence a share or more once they can begin lending again and people start spending more than they can afford. In other words, the world returns to something resembling a pre-202 norm.
I think the real short-term gainers tend to be the sub-penny stocks on OTC Markets and such. However, this is less investing and more gambling. Not everyoneâs cup of tea and I donât think thatâs the kind of âinvestingâ behaviour :freetrade: wish to encourage.
