7 Exciting Investment Trends Set to Shape Australia in 2021 (and Beyond)
The COVID-19 pandemic has changed the face of investing in Australia - and you stand to benefit. Interest rates are low, business and consumer confidence is growing, and there are plenty of ways to invest in your future
2020 was an unexpected year in more ways than one.
As the world starts to settle down and move towards a “New Normal”, you may be curious about the investment opportunities in a post-COVID world.
While many investment vehicles remain unaffected, there are a range of new opportunities created by the pandemic, and we’ve rounded up 7 of the most exciting.
Read on to discover how the Australian investment landscape has changed, and the investment trends in 2021 you should consider exploring.
1. Content is king, but streaming is the kingdom
Let’s be honest, we all indulged in a little extra TV time during the pandemic.
And while TV continues to dominate people’s leisure time, it’s rapidly shifting from linear to streaming.
Even if consumers cut back on their TV bingeing in a post-COVID world, the trend toward streaming is likely to remain in place. This is thanks to the convergence of internet coverage, growing mobile usage, and changing media consumption habits.
Although this may not be great news for collective retinas, this is great news for platforms like Netflix, Amazon Prime Video and Disney+ that will continue to see robust subscriber growth, and remain exciting investment opportunities.
2. Environmental, Social, and Corporate Governance (ESG)
If you’re investing your hard-earned money, you want to know where it’s going, right?
The demand for corporate sustainability and socially responsible practices is on the rise, and the pandemic has only fuelled people’s desire to make healthy choices (both individually and for the world).
Companies that are more environmentally focused and promote diversity may appeal to consumers that increasingly prefer to align with businesses that match their personal values. At the same time, strong corporate governance could potentially reduce investment risk due to improved transparency and better capital allocation.
Curious about the leading business trends of 2021? Click here to see how businesses have changed in the post-COVID world.
3. The (ongoing) digital revolution
The world has been going digital for a while now, but don’t expect this process to plateau anytime soon.
New technologies such as artificial intelligence, robotics and fintech disruption are prevalent themes in Australian and global markets, with many companies in these sectors trading at lofty valuations, reflecting very optimistic growth targets.
There’s no slowing the demand for digital products and services, making this a potential stepping stone as an investment opportunity.
4. Increased demand for travel stocks
“Travel, what’s that?”
It’s true the travel industry has been on an extended hiatus but as the world emerges into a ‘new normal’, expect travel to remain a well-loved and highly-desired experience.
Plenty of other sectors are set to jump if the world starts returning to normal in 2021, but pent-up demand for international travel could drive a gold rush for long-punished airline stocks, hotels and even cruise lines.
Think of all the places and countries you’d love to be exploring right now. Then multiply that by the millions of tourists and travellers desperate for the same thing, not to mention business travellers ready to forge out into the world again.
The result? A likely increase in the demand for travel stocks to represent surging consumer demand.
5. Renewed hunger for restaurant stocks
We’ve all become much more acquainted with our local Uber Eats and food delivery drivers, but as 2021 continues and the world begins to open up, expect the restaurant industry to begin its bounce-back.
Fast-casual restaurant chains are set to benefit most from the potential return to normality as many have limped along with take-out orders, so keep an eye out for fast-food restaurants and delivery companies as your investment vehicle.
As diners start to head back out into the world, expect a renewed hunger in restaurant stocks.
6. Fewer savings accounts
Investing in 2021 isn’t a ‘set and forget’ approach.
Historically low interest rates are in place to try and stimulate growth, but they also mean next to zero returns when money sits in the bank. As a result, Australians are looking to borrow money and invest in either homes or properties. People are looking for places to invest other than banks as the returns on bank products dwindle.
Expect to see real asset exposure rise, which includes commodities, precious metals, real estate and land.
7. Home renovation projects
Homeowners have spent more time than ever inside lately, providing ample time to decide whether their home brings them joy, or could be upgraded to improve their lifestyle.
People are reflecting on how important their home is to their happiness, and are renovating or improving their homes to create a better sanctuary.
Some of the home improvement projects with the highest projected ROI include:
- Garage door replacement
- Minor kitchen remodel
- Natural wood deck addition
Not only are these upgrades beneficial in the short term, but home renovation projects provide investment opportunities for future real estate sales.
Who are the winners and losers in the post-COVID investment world?
Although COVID-19 has impacted travel, hospitality, and office rent (to name a few major industries), there are sectors that have been positively impacted due to people being ‘stuck’ at home.
Companies like Clark Rubber have benefited from the surging interest in DIY, home improvement, recreational, and maintenance culture.
While the future is uncertain, it’s clear that companies in the DIY and consumer space - especially those with an impactful digital presence - are going to benefit from this behavioural change.