Best Investment Strategies for 2021 and Beyond
A new year always comes along with new challenges and opportunities for investors. But it’s hard to think of a more dramatic year for investors than the year 2020. With the pandemic upending life across all sectors, businesses especially had a peek into both the Great Recession as well as the Dot Com Bubble in just one year. Highly unpredictable it might have been, but it should have provided valuable lessons for investors in 2021 and investment strategies.
If you think of the same time last year, the stock market was subjected to the quickest bear market in history. Fortunately, the latter half of the year pretty much made up for it. In fact, everything has looked better since then. But now with some stocks at what seems like an all-time high valuation, it’s hard to predict how 2021 will be like for investors.
So it makes one wonder that what moves investors should consider for 2021 and beyond. And if we could sum it up in one piece of advice, it would be to have a mix of low-risk investments and high-risk, high-return ones.
Here are the three best investment strategies for 2021 and beyond!
Use the Barbell Approach
The best investment strategy for 2021 is preparing for economic recovery while protecting capital from potential periods of volatility. And this is where the barbell approach comes into play. This approach is about investing in both extremes of the risk spectrum by having a mix of high-risk investments with a no to a low-risk investment.
While on the low-risk side of the barbell are sectors such as technology and healthcare, on the high-risk end are opportunistic investments that are temporarily hurt by the pandemic, such as financials and energy.
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Specifically for the year 2021, IT stocks have emerged as a great opportunity for investors. IT solutions have become so central to the corporate structures that it is only expected to offer more growth. Similarly, healthcare is also an important venture for investors to add to their returns in the current year.
So, it is imperative to find companies in these sectors that offer promising risk-reward potential. And not just that, they also need to have the most room for recovery as we head toward normalization in economic activity.
Invest in EV Revolution
Back in the year 2010, when electric vehicle manufacturer Tesla entered public markets, there were those who questioned the future growth of EVs. For the next decade, many investing experts continued to wonder whether EVs were likely to remain a niche luxury purchase. But against all odds, TSLA kept powering higher.
Fast forward to 2021 and there is no denying that an EV revolution is underway. Even the opportunities are now not limited to just Tesla. In fact, some governments are now planning to move to an all-electric federal fleet. To give AV investments even more popularity and credibility, the prestigious automaker, Jaguar, has announced that it will be only making EVs by 2025.
Needless to say, autonomous driving is the next big thing that is bound to make the auto industry more profitable. As a matter of fact, the EV revolution has become one of the most popular investment opportunities on Wall Street in the last few years. With more and more best investment strategies flowing in, electric and autonomous driving is likely to grow a massive market.
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Below are two of the best autonomous driving stocks for you to invest in 2021: Alphabet Last year, Alphabet subsidiary Waymo became the first one to launch Level 4 fully driverless vehicle service in the U.S. Waymo is now only looking forward to expanding the service in 2021 and beyond. This practically makes Waymo the market leader in AV tech as well as one of the best investment opportunities for 2021.
Aptiv The major players in the EV revolution are the driving software company Aptiv and partner Lyft (LYFT). Both have together given public passengers in the Las Vegas area 100,000 paid rides in autonomous driving vehicles. Now Aptiv and partner Hyundai are working closely on an AV technology joint partnership called Motional. At the end of last year, Lyft and Motional have expressed interest in plans to launch fully autonomous vehicles in various cities on the Lyft network from 2023. This makes Aptiv another great opportunity for investors in 2021 and beyond.
Make AR Investments
The Augmented Reality (AR) and Virtual Reality (VR) market recorded more than $2 billion investments last year. And with the Covid-19 crisis, there was an immediate rise in needs and trends for consumers and businesses for remote work. All these factors have only boosted AR investments, especially in remote healthcare, entertainment, and virtual collaboration tools.
In the AR market, hardware, in particular, has emerged as a profitable and appealing investment point. And the pandemic has only boosted investment in AR hardware, where remote work solutions are in higher demand than ever.
Even better, AR investments and AR remote applications are likely to grow in 2021 in both valuation and adoption rates. AR is expected to offer businesses tools to collaborate from multiple locations, visualize information, and enable an exchange of digital products with both internal and external audiences. Therefore, there will probably be no better time than this year to include AR investments in your investment portfolio.
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As we have safely made it to 2021, one thing that is absolutely obvious is that change is a normal part of life. While it might not be the case always, it can sometimes affect your financial well-being a great deal. And your investment portfolio is no exception to it.
Therefore, in the given circumstances, the best investment strategy is to have a clear plan of action. This plan of action should be built around increasing your investment returns, decreasing your losses, improve control over your cash flow. All of these can have a major impact on your financial situation going forward. As a result, making the best investment strategies is paramount.
So if you are a new investor, you have to understand (and even more so in 2021) that investing isn’t a get-rich-quick scheme. You have to truly understand what you are investing in, have a plan, and the help you need to manage your money. And one way to do that is by using the Doctor Money app to keep track of your money. Download the app today and make investing surprisingly affordable even when you don’t have a lot of money.