Investors are now actively seeking ‘new world’ sectors and companies as the world readjusts to life with coronavirus and looks ahead to an economic recovery.
The assessment from Nigel Green, the chief executive and founder of deVere Group, one of the world’s largest independent financial advisory organisations with operations in 100 countries, comes as global stock markets rallied on Tuesday.
Green notes: “Every economic downturn creates a new normal. The one being triggered by the coronavirus pandemic will be the same.
“The Covid-19 impact has hit firms across the world – there’s been immense international disruption – with many sectors experiencing major issues of supply, demand, or both.
“However there remain some sections of the economy which are benefitting from the coronavirus fallout.”
He continues: “Sensibly, investors are now actively seeking these ‘new world’ sectors and companies in order to grow and protect their wealth.
“This is evidenced by the tech-heavy Nasdaq Composite index which has done well, where other global indices have faltered.
“New industries will come into their own and, as ever, there will be winners and losers. This will mean job losses in some sectors and huge – possibly unprecedented – job and investment opportunities in others.”
Last week, in a media release, Nigel Green noted that a Covid-19 recession is likely “to fundamentally shift how we live, do business and invest.” He added that it could also be expected to “speed up the Fourth Revolution, which is fuelled by new technologies, such as Artificial Intelligence and mobile supercomputing.”
Green goes on to say: “Big tech is just one likely winner. The likes of Apple, Facebook, Amazon, and Google’s parent company Alphabet have immense cash reserves to continue, maybe even bolster, research and development and to sustain their business operations.
“This sector is also likely to face higher demand as social distancing, isolation and quarantine affect much of its existing and potential consumer base.
“Plus, recently heightened regulatory restrictions and political opposition to their expansion and growth of influence is likely to be scaled back considerably.”
He adds: “For similar and other reasons, other sectors besides the Silicon Valley giants, are likely to continue to offer positives for investors.
“These include pharmaceutical and healthcare firms, delivery brands, supermarkets and manufacturers of electronic goods, such as fridges and freezers.”
Nigel Green concludes: “Of course, there will be a recovery from the global economic impact of coronavirus.
“But the world has already changed as a result of it – and will do so more – and savvy investors are aware of this new normal and are already readjusting their portfolios accordingly.
“Times of immense tumult can be times of great ingenuity, promise and opportunity.”