Covid-19 pandemic is one single event that has impacted most countries across the globe. World economy has been majorly hit with business losses and rising unemployment. The pandemic has also ruffled the social and political fabric in several countries. Even as things are improving, threat from new variants of Covid continues to create an air of worry and uncertainty.
Among the major challenges people are facing is regarding their investment decisions. There is no clarity about the future and how things will evolve during and after the pandemic. Many people are looking for the safest investment options to park their money. If you are experiencing something similar, here are some relatively safer investment options that you can consider during Covid.
Asian equities – Situation in Asian countries has improved dramatically since the first Covid wave. Valuation of Asian equities are on the rise. Even with newer variants of Covid such as Omicron, Asian markets will be a safer investment option. However, if you want to stick with U.S. equities, you can choose stocks that have high yield and/or strong dividend. You can also choose dividend futures.
Housing – Household savings in US have increased significantly. It is powered by government transfer payments and reduced expenses during lockdown. As per estimates, consumers in US have excess savings of around $2.5 trillion. When things normalize, a significant percentage of these savings will be released in the economy. Households are most likely to invest in segments such as housing, media/entertainment and specialty retail. Companies related to these segments can be good investment options.
Semiconductor, tech, renewables, EVs – Industry segments like semiconductors, advanced tech, renewable energy and electric vehicles (EVs) are expected to witness strong growth in the coming years. Globally, there’s increased focus on reducing carbon footprint and transitioning to an all-electric ecosystem. These goals will increase the demand for semiconductors and renewable energy equipment. Companies in these segments can be considered a safe investment option.
Latin American equities – Latin American countries like Chile could be major growth drivers for world economy. These have vast reserves of important elements like copper and lithium. Chile is currently one of the largest producers of lithium in the world. Another thing about Chilian equities is that they are currently undervalued by around 40%. This presents a significant earning potential over the next 5-10 years.
Innovation and automation – Look out for companies that are leading the way in terms of innovation and automation. These will be playing a critical role in a highly interconnected world. Companies that are into robotics, AI, machine learning and autonomous driving tech could be good investment options in current times.
When investing your money during challenging times, be ready to stay invested over the long term. This will help you tide over cyclical ups and downs in valuation of your investments. Invest only that portion of your savings that you won’t be needing anytime soon.