Pfizer vaccine: How I’m investing now

Pfizer’s coronavirus vaccine has been described as a ‘game-changer’ for stocks. Here, Motley Fool writer Edward Sheldon looks at where he is investing now.

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.

Syringe and vial on blue background

Image source: Getty Images

News that pharmaceutical giant Pfizer has developed a coronavirus vaccine sent UK shares higher this week. This vaccine has been described as a ‘game-changer’ for stocks. As a result, investors have been scrambling to reposition their portfolios. 

Here, I’m going to look at where I’m investing my own money now that a coronavirus vaccine is on the horizon. These are the stocks I’m buying.

Pfizer vaccine: a game-changer? 

On the back of the vaccine news, many investors are now piling into the sectors that were hit the hardest by Covid-19, such as airlines, oil, and hospitality. However, this is not an approach I’m going to take. A vaccine will certainly benefit companies in these industries. Yet many may continue to face challenges for a while.

Airlines, for example, may not return to normal for years, despite a vaccine. The coronavirus has devastated this industry, and demand may be depressed for years. Aviation analyst John Strickland summed up the situation well. He responded to the vaccine development by saying: “This news is certainly very welcome but it would be massively premature to say that the airline sector can now return to normal. Enormous damage has already been done and we can expect failures this winter”.

Where I’m investing now

So, where will I be investing now that a vaccine is on the cards? Well, in recent years, I’ve been focusing my portfolio on three main types of stocks. I plan to continue investing this way going forward.

Large-cap technology stocks are one area of the stock market I’ve been focusing on. Companies I’ve invested in include Microsoft, Amazon, and Mastercard. In my view, all of these companies are well placed to benefit from the digital revolution. Amazon, for example, is benefiting from the growth of online shopping. Mastercard is benefiting from the shift to digital payments. Microsoft is benefiting from the growth of the cloud. I think these kinds of stocks should do well in the years ahead irrespective of what happens with Covid-19.

Large-cap dividend stocks are another area of the market I’ve focused on. Some examples of companies I’ve invested in include Diageo, Reckitt Benckiser, Unilever, and Smith & Nephew. All of these stocks have solid long-term growth potential. However, they’re a little less volatile than my growth stocks which means they bring stability to my portfolio. 

Finally, I’ve also invested a little bit of money in small-cap growth stocks. These kinds of stocks are higher risk. However, they have the potential for explosive gains. Some examples of stocks I’ve bought include dotDigitalKeywords Studios, and freelance employment platform operator Upwork.

My goal: strong long-term returns

All of the companies I am investing in are exposed to powerful growth themes such as increased digitalisation, the ageing population, and the rise of wealth in the emerging markets. This means they should grow significantly over time. All have competitive advantages which should protect market share.

Meanwhile, with the exception of a few of the smaller companies I own, most companies are highly profitable. This increases the chances that they will turn out to be good long-term investments.

I believe this focus on highly-profitable companies with strong growth prospects should deliver strong returns in the long run.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be considered so you should consider taking independent financial advice.

Edward Sheldon owns shares in Amazon, Microsoft, Mastercard, Reckitt Bencksiser, Unilever, Diageo, Smith & Nephew, Upwork, Keywords Studios and dotDigital. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Amazon, Mastercard, and Microsoft. The Motley Fool UK has recommended Diageo, dotDigital Group, Keywords Studios, and Unilever and recommends the following options: long January 2021 $85 calls on Microsoft, short January 2021 $115 calls on Microsoft, short January 2022 $1940 calls on Amazon, and long January 2022 $1920 calls on Amazon. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Jumbo jet preparing to take off on a runway at sunset
Investing Articles

When will the Rolls-Royce share price recover?

The Rolls-Royce share price may be down, but cash flows are surging! Zaven Boyrazian explores how long it could be…

Read more »

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

1 dirt-cheap FTSE 100 stock I think could TRIPLE my money!

Demand for lithium is forecast to surge by 42 times, enabling this FTSE 100 stock to potentially supercharge its profits…

Read more »

Young woman working at modern office. Technical price graph and indicator, red and green candlestick chart and stock trading computer screen background.
Investing Articles

Should I invest in the FTSE 100 – or try to beat it?

Our writer has the option of investing in a FTSE 100 tracker fund. So why does he choose to buy…

Read more »

Young black woman walking in Central London for shopping
Investing Articles

£1,500 to invest in a Stocks and Shares ISA? Here’s how I’d do it

Our writer has been investing in his Stocks and Shares ISA. Here he details how he could put £1,500 in…

Read more »

One English pound placed on a graph to represent an economic down turn
Investing Articles

2 top FTSE 100 shares I’d buy before the market rebounds!

Christopher Ruane identifies a pair of FTSE 100 shares that have both tumbled in the past year and that he…

Read more »

Business development to success and FTSE 100 250 350 growth concept.
Investing Articles

Here’s why the next bull market may have already begun

The UK stock market has taken the Bank of England's interest rate hike in its stride and green shoots suggest…

Read more »

Gold medal
Investing Articles

No contest! Here’s my stock of the week

An update from this company offered some relief from the economic gloom. It's this Fool's stock of the week.

Read more »

Cogs turning against each other
Investing Articles

Scottish Mortgage shares are back on the rise: is now the time to jump onboard?

Scottish Mortgage shares have risen over 25% in the past 30 days. This Fool takes a look at why and…

Read more »