Wonder where to make a smart investment in 2021? It’s all been a bit crazy in recent times, what with the Pandemic and Brexit – two seismic challenges for the UK (although the latter not quite as massive as originally thought). But there’s still time…
The UK did fall into a recession in August 2021. But, the FTSE 100 was up by 17% year-on-year in April this year. Globally it’s certainly been a bit rollercoaster-like – up and down on a regular basis.
Thankfully, though, the coronavirus vaccines have allowed economies to restart and get up and running once again. The new American presidency is another bright spot on the horizon. There should be no more nasty surprises (albeit the speedy withdrawal of troops from Afghanistan hasn’t done him any favours on the world stage).
But still, the world does look as if it’s getting back to some sort of normality. So, with that in mind, where should you consider putting your money this year? Here are some of the more favourable industries and sectors to consider:
Technology
Where would we have been in 2021 without the ability to Zoom. Working from home and hosting meetings with colleagues and clients would have proved far too onerous without the technological wizardry of either Zoom or Teams. To the extent that Zoom, like Google, has become a verb.
And it wasn’t all about work – or play, for that matter. No, we also shopped online. Massively. Well, we had no other option when the physical stores were shut. And didn’t we find it a breeze?
According to research firm Alvarez & Marsal and Retail Economics, around 17.2m of us in the UK (that’s around a quarter of the population) – say we’re going to continue shopping online, despite the stores flinging their doors wide open again.
Where to invest: So, the big money, it seems is in the Cloud computing and online retail sectors. And we’ll also need devices to get online so consumer electronics will do well too, say analysts. Artificial Intelligence and software development companies are also certainly well worth a look at for long-term investment strategies.
Ethical investing
As we all know, climate change issues are huge right now. And that’s not gone unnoticed by investors. In fact, within the past few years the ‘need to do right by the planet’ has become big business. Quite literally.
There are so many ‘ethical’ funds in which to invest these days. Even the government has issued Green Savings Bonds so that savers can help give the environment a boost. And then, of course, there is the UN Climate Change Conference COP26, which will take place in Glasgow in November and on which the world’s attention will be focused. America too has resigned to the Paris Agreement.
But ethical investing is about more than climate change and cutting back on carbon emissions, saving the rain forests etc. It tends to come under such umbrella terms as Socially responsible investing (SRI), Environmental, social and governance (ESG), Impact investing and Sustainable investing.
Investment into ethical and ESG funds grew 50% between June 2019 and 2020, according to investment platform Hargreaves Lansdown. The fact that both traditional big hitters such as airline and oil stocks performed poorly, hasn’t gone unnoticed either. They will, of course, recover as time goes on but they certainly don’t fall under the ESG banner – at the moment. There are sustainable pointers these firms could get involved in – and probably will as time goes on if they want to continue to attract investors and hold on to big shareholders.
Cryptocurrency
Most of us have heard of Bitcoin. It’s a ‘digital asset’ which behaves like normal currency. The reason it’s here is to ‘do away with the middle man’ ie the banks and other lending institutions that were taking such a big cut from all our financial transactions.
There are other cryptocurrencies out there, of course. But none as well-known as Bitcoin. Even US entrepreneur Elon Musk got in on the act – until he didn’t. He pulled out and the share price plunged. It’s back up again though.
For the uninitiated, the currency is purchased in units. And, although it made an impressive 525% for investors last year, it is pretty expensive to buy. And there’s no reason the price can’t fall either – even without Elon Musk. High earning shares such as these tend to be in volatile markets and cryptocurrency is certainly that right now.
Get in touch
Wondering where the smart investment money is going for the rest of 2021? Keep reading our blog and get in touch if you require a Medallion Signature Guarantee. We’d be happy to help. Call 0203 985 9551 or +44 20 8150 2010 from outside the UK.