5 Ways the World Could Change: An Investor Watchlist

The global coronavirus outbreak has changed everyday life in profound ways ― and will likely reshape the future as well. Tony DeSpirito identifies five areas of change that could have implications for investors.

Market volatility never feels good. The kind we’ve felt amid the coronavirus pandemic has been particularly taxing. Of course, this is no ordinary moment in history. It will be a defining moment for individuals, businesses and industries worldwide.

Long-term stock investors know they are buying into the perceived future value of a company. That’s exactly why it’s important to look past the next few weeks to the months and years ahead. Chances are the world will look very different than it did when we started 2020 ― and that can mean new doors for investors to explore.

In a previous post, I spoke about creating a shopping list for your portfolio for the more immediate rise out of the crisis. Today I’ll focus on five areas I think may look very different as the world recalibrates from a health crisis that tested every aspect of daily life.

1. Technology to power a low-contact world

Technology was a strong performer before the crisis and is well poised to be a winner going forward. The crisis has turbocharged trends already in motion: remote offices, online education, online gaming, and streaming. We expect these and many more manifestations of a virtual life, now widespread and embraced, will only accelerate, and the software and infrastructure to support them will be in increased demand.

Beyond that, technology to power contact-free activity of all sorts could benefit. Consider driver-less delivery, telehealth and eSports. 5G could also get a boost as speed of data transfer becomes a more imminent need in remote work settings.

2. Global vs. local debate

To the extent countries look inward to care for their populations and economies, we could see a move from the decades-long trend of globalization to regionalization or localization. U.S.-China trade tensions had already incited questions about the location of global supply chains and risk of concentration. Coronavirus intensified the attention.

Supply chains will need to diversify to enhance their resilience. Many countries will likely look to bring manufacturing home. Yet shifting from a concentrated to a more diversified supply chain will come with costs. Companies can either absorb these costs (which would hurt profitability) or pass them on to consumers by charging higher prices for end products (which would be inflationary).