Trading Opportunities in the Post-COVID Era

What kinds of opportunities await active traders as the COVID pandemic winds down? The past year will go down in financial history as a unique era, a time when much of the world’s monetary, social, and industrial activity slowed nearly to a halt. It was a time when many high-flying corporations took it to the chin and investors of all kinds were left wondering what might be the next domino to fall. Now, as we enter the second quarter of 2021 and see eased social restrictions almost everywhere, many of those temporarily shuttered businesses are opening their doors again.

What might these seismic economic shifts mean to a solo securities trader in Asia, a new forex broker in Canada, a long-time commodities agent in the U.S., or any other person who buys and sells things like options, stocks, foreign currency, bonds, precious metals, and cryptocurrency? Here’s a short list of just a few of the opportunities traders all over the world might be able to take advantage of as 2021 unfolds. Note that some categories are more suited to ETFs (exchange traded funds) than individual stock investing.

Industrials

Many small industrial firms went out of business by the end of 2020. Those that survived are picking up the pieces and returning to everyday operational capacity, albeit slowly. In the post-COVID period of 2021, it’s important to keep an eye on this sector because it’s a mixed bag. Some companies suffered so much that they’ll be slow to return to pre-2020 levels of output. Others are already experiencing a resurgence, and it’s apparent by the stock prices. One way to approach this niche is to try and identify a half-dozen large industrial entities whose share values have slowly been rising since the beginning of the year. That was when many of the world’s largest producers began limited factory hours and started to ramp up their overall activity.

Retail

Consumer retail stores were among the hardest hit during the entire run of the virus, primarily because they are geared to in-person sales. This sector, for our purposes, does not include organizations that sell exclusively or primarily online. Since lockdown and quarantine restrictions began to ease, the entire retail sector has been bouncing back quite quickly. And now that numerous states and nations have completely lifted limits on group gatherings, sales are coming back. It helped that many of these in-person sellers opted to build up their online presence during the height of the pandemic and were able to salvage their bottom lines. Opportunities exist in health, beauty, and home products retail corporations. This is another part of the economy, like energy, where there will be some winners and some losers. That means opportunities most likely rest with exchange-traded funds.

Energy

Energy, including oil and gas producers, are seeing revenues rise. Because many people cut back on driving for the better part of a year, fuel sales, and profits, were way down. Likewise, energy sales to industrial producers were low as a result of major dips in industrial production, as noted above. There was a synergistic downside to the entire situation, where one segment of the economy negatively affected others in a cyclical, round robin way. Energy production is back up and so are sales at both the retail and wholesale levels. If you’re unsure of making a specific selection or aren’t familiar with individual corporations in this niche, consider looking at some of the exchange traded funds (ETFs) for a broader exposure to the whole sector.

Entertainment

The most obvious victim of social lockdowns and quarantines is the entertainment industry, which by its nature relies on human beings attending events, like concerts, sports games, and films. Sellers of online entertainment products and services did well, but theater chains, sports arenas, and public venues of all kinds were deeply affected by COVID pandemic and its social distancing guidelines. It’s probably too early to pick and resurgent companies in this area, but once there is a full return pre-COVID social activity, the entire entertainment sector could come back quickly.

Restaurants

Thousands of family-owned restaurants closed permanently between March 2020 and the new year. Most won’t be coming back. The corporate chains, in most cases, had enough economic muscle to survive the long downturn and are now back with limited seating due to social distance regulations. However, many of the stock prices of the chains have already begun to rise, almost in anticipation of a pent-up wave of customers who can’t wait to dine out again.

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