Investing for a pandemic-proof portfolio

What to invest in if the world has changed due to the pandemic…

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young woman wearing face mask while walking in the streets of London

Image source: Getty Images

The FTSE All-Share index is still languishing about 15% below where we began the year but it’s well up from the lows.
Investors in the US market – especially in its technology shares – have enjoyed an even stronger recovery from the doom and gloom that gave us the fastest bear market ever in March.
Partly this stock market bounce reflects investors coming to terms with the pandemic and its economic consequences. As rationality returns, we’re better able to reflect the balance of risks without our decisions being egged on by an overdose of fear and adrenaline.
But beneath the index level, when looking at individual stocks, it’s clear the market has also done a first pass at sorting winners and losers from the pandemic and its aftermath.

Shares in online retailers and Internet platforms haven’t just rallied because business boomed while we were stuck at home. Investors are also betting these firms have secured more of our attention for the future, too, as a result.
Similarly the travails of property firms and restaurants doesn’t just represent the loss of six months trading – or even the risk of bankruptcy. It also reflects that the business model of these firms may be impaired indefinitely.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

How to own the future

If the world really is changed forever by Covid-19, then we might have only seen the start of a reordering in the value of many aspects of the economy.
And over the years I’ve noticed markets often overreact in the short term while under-reacting in the long term.
In short: it’s probably not too late to buy.
Here are three shares to give you a piece of the post-pandemic action.

“Bring me my stuff!”

Online retail is nothing new. But who didn’t buy more direct to their door during lockdown?
People tried new online shops as well as new categories – for example fresh food and clothing – and they also increased how much they spent. All of this bodes extremely well for online retail.
One way to play the theme is Ocado (LSE: OCDO). As well as its own online grocery business, Ocado sells retail logistics and distribution know-how to third parties worldwide. If the move to online shopping has jumped forward five years in six months, then despite its strong share price rise since March, Ocado could have much further to go.

  • Also consider Tritax Big Box and ASOS

“Give me more room!”

Rightmove (LSE: RMV) could win if the pundits are correct about our shifting priorities on home ownership. The theory – and early data – suggests many of us are now desperate for more outdoor space, whether gained by moving to the country or from having a garden or a balcony attached to our urban crash pads.
Of course, space is at a premium on this crowded and under-housed island. Not everyone will be able to afford to get the homes they want, and that could have an impact on valuations. But in turn this could result in lower prices that enable more first-time buyers to buy into the property market.

Builders could start to cater for this priority reboot by building properties with more breathing room – as well as home offices or more multifunctional spaces.
The bottom line is by turning over decades of established property trends – which had seen us move from suburbs to inner-city cores, and away from houses with unruly gardens to self-contained luxury flats – the property market has now been thrown into flux and perhaps upheaval.
It should all be good for companies that can profit from the resultant reshuffling.

  • Also consider M Winkworth, Persimmon

“I’m staying in!”

The UK stock market is poorly provisioned when it comes to technology firms.
There’s one area, though, where we’ve seen a renaissance in opportunities and that’s video game companies.
The UK has a long-established reputation for cutting-edge game development and several developers are listed on the stock market. They provide a way to profit from one of the most obvious corollaries of a fearful virus-infested world… the desire to hide away from it!
Frontier Developments (LSE: FDEV) could be a big beneficiary of our escaping reality. Its games are typically incredibly deep and involved. Some studios make mobile games than you play for 10 minutes on the bus on the way to the pub. Frontier creates games you play for months, immersed in an alternate realm. As a bonus it’s headed up by one of the UK’s greatest game makers, David Braben.
Of course, if we get a vaccine in the next few months then our entertainment choices will surely undergo some mean reversion. I’m no fan of crowds and noise, but even I’m itching to go to a music concert or a sports stadium, or even just an over-populated nightclub or bar.
But similar to the shift to online shopping, I suspect our stint in lockdown and its aftermath has created more game fans for life. Game developers will always be risky individual investments. But the future of the sector looks even brighter.

  • Also consider Codemasters, Team17, Keyword Studios

More on Investing Articles

Young brown woman delighted with what she sees on her screen
Investing Articles

3 signs that shares could be set for a new bull market

Stock markets are cyclical, and investors go through phases of buying and selling. How can we best deal with the…

Read more »

Passive income text with pin graph chart on business table
Investing Articles

How I plan to make passive income with just £3 a day

There are multiple ways to make passive income in 2022, but our writer considers a popular method that involves dividend…

Read more »

Middle-aged white man pulling an aggrieved face while looking at a screen
Investing Articles

Lloyds shares are down 10% in 2022. What next?

Lloyds shares have dropped by almost a tenth so far in 2022. But the bank is in good shape to…

Read more »

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

How to aim to use the Warren Buffett method to make a million, starting today

Why do investors love Warren Buffett so much? His 3.6 million percent investment return since 1965 probably has a lot…

Read more »

Various denominations of notes in a pile
Investing Articles

3 big income stocks hiding in plain sight

There are plenty of high-paying income stocks flying under the radar right now. Paul Summers offers three examples he likes.

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

2 FTSE 100 shares I’m buying in July

Andrew Woods wonders whether these two FTSE 100 shares could bring growth to his portfolio and if he should add…

Read more »

positive mental health woman
Investing Articles

2 dirt-cheap stocks investors should buy to hold until 2030!

Recent market volatility means lots of UK shares now offer brilliant value. Here are two ultra-cheap stocks on my radar…

Read more »

Playful senior couple in aprons dancing and smiling while preparing healthy dinner at home
Investing Articles

My top 7 dividend shares to buy as inflation soars

Dividend shares can be an excellent way to earn some passive income. Our writer considers seven top picks to help…

Read more »