Investing in the Time of COVID-19

No matter where you are in the world right now, there is one pressing problem on everyone’s mind — the ongoing COVID-19 pandemic. With many countries in the world under lockdown, economic activity has stopped to a near standstill.

In the Philippines, when the lockdown was first announced, the stock market plunged 6.8%, the worst drop since the 2008 Global Financial Crisis. In March alone, PSE’s circuit breakers were triggered twice. This pandemic has brought about a “new normal” and with it, many changes in the way we do businesses. With this new normal bound to take root for the upcoming years, what industries are safe to invest in, and what should we steer away from?

With so many changes in the world, should we even be investing? The short answer — yes. However, it is important to know where to invest to reap the most benefits.

Read on to learn more about the emerging industries and those at risk of falling apart below.

Industries Most Impacted

These are the industries that are taking a huge hit from the ongoing pandemic, whether social distancing measures are making them unable to resume operations, or they are just not equipped to transition to the new normal.

Airline and Tourism

Taking the biggest and most obvious hit are airline companies that are tourism-related businesses. With the world in lockdown and everyone wary of travel, this industry is unable to resume operations. Even after the pandemic is over, they will not recuperate as quickly as others. When lockdowns are lifted, many people will have doubts about traveling in the near future, and travel traffic will not reach the heights it was in pre-lockdown for many years. Additionally, social distancing measures put into place during flights will only allow for at most two-thirds of an airplane to be filled, leading to losses on the part of the airline. Even now, airlines have fixed costs to pay for their airplanes being grounded; but with no passengers to manage the costs, it’s only a matter of time before many airlines become strapped for cash.

Entertainment/Leisure

Another industry facing huge risks, the entertainment/leisure industry will take a long time to recover from the effects of this pandemic. Leisure items are considered non-essential, meaning that people will not prioritize buying these right now. Additionally, retailers will face difficulty in their supply chain due to uncertainties in other countries where these are sourced. Malls will need to adopt intensive health measures to ensure the safety of shoppers, but there is no certainty that many individuals will even want to go out during these times. However, one aspect that may see a rise in demand is the home furnishing industry. With many shifting to working from home, there is a need to improve home facilities by buying new items. Despite this, the industry as a whole will still be facing tremendous challenges in the future, and no certainty as to whether it can recover from this.

Automotive

Automobiles are just not going to be individuals’ top priority coming out of the pandemic. With many also losing their jobs due to the recession it caused, cars will not be able to fit in many’s budgets. Additionally, they face challenges by a disrupted supply chain: with many parts coming from various places around the world, there is no guarantee that these factories will resume operations right away. Many factories have also shifted to making medical equipment to cater to the huge demand for it. There is no clear timeframe as to when these factories will shift back to making car parts, or whether they will at all.

Industries Least Impacted

There are some industries that will come out relatively unharmed, with some even growing from this pandemic. This is a good opportunity to invest in these industries and become more knowledgeable on them.

Food Manufacturing

Perhaps the industry that will reap the most benefits, the food manufacturing industry is one that is definitely not suffering from this pandemic. Food is a top priority for many, and food manufacturers are reaping the benefits of increased demand. For many, there has been little to no devaluation of their stock. Food manufacturing is definitely a stable industry, and one to look out for today and in the future.

Health and Fitness

Medical equipment, PPEs, and vitamins are selling out quickly these days, with many rushing to protect themselves as best they can from the virus. This increased demand will not slow down — with no vaccine in sight, individuals will still try to protect themselves through the available means they can. Additionally, the home fitness industry will see a rise as gyms shut down. It has become an opportunity for retailers of fitness equipment to increase their sales and reach more individuals.

Technology

This industry has seen the largest boom due to this pandemic. With social distancing measures in place, almost everyone has had to rely on technology to reach out to others. The use of platforms such as Zoom has been essential in moving forward businesses and education. There is also a shift to online means for banking and shopping, which was once not so common. These changing behaviors are likely to stick even after the pandemic, as many see the convenience of online means. There is a huge opportunity to invest in technology-based companies, and even start one today.

Looking Forward

The post-pandemic world will see permanent changes in consumer behavior and spending. Perhaps most prominently, there will be a shift in online means to conduct business, communicate, and go about our daily lives. Given this, there is a huge opportunity for growth in that field. However, the most important thing to remember is that times are changing — there is a new normal evolving, and it does not look like we will be going back to how business was in the past. It is critical to keep an open mind in order to keep looking forward and achieve success in this new world.

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