It has been a wild year so far for the stock market with COVID-19. So far we have seen a “V” shaped recovery in the market off the previous lows that was greatly impacted by the COVID-19 pandemic. There has been a huge resurgence of investors thanks to all of the free online brokerages like Robinhood, E-trade, TD Ameritade, etc. I am curious to see if the bull market will continue this year or if we are in a huge market bubble with the upcoming presidential election and resurgence of COVID-19 in the fall and winter months. What is everyone’s thoughts about the market? Do you think that the bull market will continue or are we due for another substantial market correction?
I think this is an excellent question that’s on the mind of any investor. Its tough to say how the market will react in any election year, but I think that the COVID-19 pandemic has brought out interesting opportunities for disruptive companies, or those that are able to adapt quickly. We have seen the stock prices for companies such as Zoom or Teladoc, which are uniquely prepared for a situation like this, roughly double just since the pandemic was declared a national emergency in March. On the other we are seeing major retailers who are traditionally reliant on brick and mortar sales for the majority of their revenue, such as Brooks Brothers, JC penny and J Crew filing for bankruptcy. It would appear that at least for the time being these trends look to be as we have been hearing “the new normal,” but how will this affect others as well?
Yeah it is super interesting to see how the “COVID-19” stocks (Zoom, Teladoc, Peloton, etc.) that have been thriving during the pandemic continue to perform after both the world and US economies fully recover from the pandemic crises. There is a lot of speculation about when exactly a vaccine will become available. Financial analysts have been all over the place on their predictions and I highly expect there to be a continuation of increased market turbulence for the foreseeable future.
I think the pandemic has been a textbook example in “fast forward” if you will, showing how companies that can’t adapt will fade into history. It has proven that from here forward, legacy alone will not be enough to attract public investment. Adaptability and ability to pivot are now going to be at the very top of the list of qualities that determine what attracts investors, and ultimately, share prices of course.
As for the market itself in the broader picture, one tried and true investment principal remains solid; H.O.D.L.
I think some of the recovery has been attributable to the anticipation of a vaccine in early 2021. If that actually comes to fruition, what out! Look at Pharma stocks like Pfizer, Lilly, and others.
Also Big Tech is on a tear during this time! Amazon, Apple, etc. show no signs of slowing.