What is the new 'norm' in investing?
As we are all aware, once the COVID-19 pandemic hit, life changed drastically for the long term and we are still unsure when and if things will return back to 'normal'. In this time, we must consider that the new 'norm' may well be the current world we live in.
What changed in terms of investing?
As consumer behaviour changed and working habits, so did the performance of the stock market. Working from home, closed gyms and online shopping meant FAANG stocks (Facebook (FB), Amazon (AMZN), Apple (AAPL), Netflix (NFLX) and Google (renamed Alphabet)) soared to unprecedented levels. This group of stocks represent roughly 20% of the S&P 500 and therefore they are responsible for the huge gains that we saw in the S&P 500 last year.
By the end of November 2020, the S&P 500 was up around 13% for the year, Microsoft was up by 36%, FB by 40%, NFLX by 55%, AAPL by 67% and AMZN gained a massive 70%. With multiple vaccines on the market, analysts predicted that the FAANG stocks may not have the same success as they did last year, with life hopefully returning back to offices and restrictions easing.
If investors turn away from FAANG, which tech stocks or investment sectors will be on the top of the list for the coming year?
Unstoppable Streaming Stocks
Finding investments is hard when you don't know what's shifting in consumer behaviour and daily economical events, that's why it's important to turn on the news and use things like FXTB's economic calendar to stay informed.
One thing that won't change is on-demand streaming, it not only has transformed the way we consume media, but also how people exercise. This trend is driving the performance of stocks such as Disney, Spotify and Peloton.
Disney's stock price has managed a 19% return over the last 12 months despite closing theme parks, cruise ships and delayed film projects so now that Disney streaming is online, it could push a new growth for the media company.
Since the initial IPO of Spotify, the stock price is up 144%. Recently entering new markets such as Russia (which proved to be more successful than predicted), Spotify is now offering new podcast content as well as music which appeals to even more types of consumer. Investment in more content and markets could truly drive the streaming platform into higher gains over the next few years.
Peloton has quadrupled its revenue from 2017-2019 and has invested a large amount into spreading brand awareness. On-demand, online exercise workouts from home have exploded since the pandemic and Peloton was not one to miss out on this trend. Their revenue has increased 232% YoY in the recent quarter and with only 1.33 million subscribers (3.6 million app users), Peloton has huge potential for expansion. As gym memberships are still on hold, this could be the fitness app stock to invest in, in 2021.
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This article was submitted by ForexTB.