Understanding the current investment trends enables you to see the big picture better. While there is never a guarantee for a prediction to be correct, a knowledgeable forecast about companies that have the highest profit potential is always better than a blind guess.

Reasons to Be Optimistic

Despite the fact that we’ve been through a year of choppy global stock markets, there are grounds
for investors to stay positive:

• The number of people vaccinated against COVID-19 is growing, which means that soon enough,
• life will get back to normal
• US politics are expected to have positive changes due to a more conventional presidency.
• Even though there are still nuances to be sorted out, there’s currently more clarity around Brexit.

Top-5 Investment Opportunities 2021

Now that we have a brighter perspective, let’s get to the main investment trends of this year:

1. Ethical Investing

In 2020, plenty of traditional stocks, such as those of oil and airlines, stumbled. This made many experts stop and rethink whether such investments can still be regarded as financially successful and ethical. Besides, numerous investors also fear that the economic fallout that was registered due to COVID-19 may repeat itself unless the world lowers carbon emissions.

The global pandemic clearly intensified the interest in creating a diversified portfolio using Environmental, Social, and Governance (ESG) and ethical funds. Within just one year since June 2019, the investment flows into these niches doubled.

The political focus also remains fixed on the planet’s welfare, with the US rejoining the Paris Agreement on Climate Change and the UK hosting the UN Climate Change Conference (COP26) being bright examples. Thus, ethical and sustainable investing is among the key drivers of growth in assets under management this year.

2. Technology
   The online shopping and work-from-home trends brought by 2020 are here to stay. For instance, it is estimated that 17.2m Brits, which is nearly a quarter of the UK’s population, plan to switch their shopping habits permanently due to the growth of online sales’ popularity during COVID-19.

Besides, when it comes to the working environment, plenty of people are reluctant to return to the office. Thus, we can expect superior profits growth from online retail, cloud computing, consumer electronics, AI, and cyber security companies.

3. Healthcare
   Last year has reminded the world once again how important the healthcare sector is. While it has not been a point of interest for the majority of investors for many years due to its focus on age demographics, COVID-19 showcased the need for innovation in this niche, particularly in the spheres of vaccination and virtual care technologies.
4. China
   Regardless of having the first registered COVID-19 case and a dreadful pandemic situation in the first several months of 2020, China managed to emerge stronger. The country introduced innovative disease-control strategies while the Shanghai Stock Exchange composite index has risen by nearly 25% as of February 11.

Notably, from January to October 2020, foreign direct investment into China increased by 6.4% year-over-year to $115 billion. Besides, multinational giants like BMW, ExxonMobil, and Allianz have also increased their investment in China. Other factors in the country’s favor include TikTok’s rapid growth in popularity and potential improved political coherence with the US driven by Joe Biden’s initiative.

Therefore, in the next few years, China and other emerging markets will be of interest to experienced investors. Pay close attention to funds like Morgan Stanley Asia Opportunity and multinational companies that conduct business activities in China for great investment chances.

5. Cryptocurrency
   Bitcoin seems to always be in the public eye. No wonder, since over the course of last year, it has returned a whopping 525% for investors. While investing in BTC could be an extremely profitable endeavor, there are certain disadvantages to it.

Even though you can buy bitcoin units, their price is rather high, which imposes significant risk in case their value drops. Therefore, since cryptocurrency is highly volatile and the higher the price is, the further it has to fall, remember not to invest all your funds in it.

Depending on your risk tolerance, you can choose to go for developed cryptocurrencies, like Ethereum, or explore some options that emerged more recently.

More Uncertainty to Come?

While 2021 has brought the focus on the world’s recovery from the impact of COVID-19, the investment vector is not completely clear. As soon as the world returns back to normal, the travel and entertainment industries are likely to thrive. Yet, if a new wave of the virus hits, investors will stick to the “stay at home” stocks.

Due to such uncertainty, putting all the eggs in one basket is extremely risky. A good way to be prepared for anything is to own stocks in both camps. Another option is to invest in stocks with both defensive and recovery characteristics.