Most of us have sounded the New Year in a socially distanced way, often from our sofas. We toasted with friends – the zabaglione virtually touched each other – via video calls. And we were happy to put 2020 behind us. But when planning where to invest in 2021, it’s important to keep that window open for the past year. To be successful now and beyond, we shouldn’t forget everything that happened in the difficult year of 2020.
In 2020, investors faced a completely new and unexpected situation: the coronavirus pandemic. Its effect on the stock market was temporary: the market collapsed, then recovered. But its effect on how companies do business and how consumers operate continues. And the crisis itself continues. So, understanding this, let’s talk about the best way to invest $ 100,000 right now. (And if you don’t have that amount, you can scale this plan to fit your budget.)
The ongoing crisis
First, I’d invest $ 50,000 in a basket of companies that won’t be hurt by the ongoing health crisis. Despite the launch of a vaccination program, COVID-19 cases are on the rise in the U.S. Even if you invest in the long-term, this element is important. Why? Because we don’t know how long the situation will last and we don’t know the full effect it will have on the companies that are suffering the most.
Considering this, I would invest $ 10,000 each in Abbott Laboratories (NYSE: ABT), Teladoc Health (NYSE: TDOC), Vertex Pharmaceuticals (NASDAQ: VRTX), Amazon (NASDAQ: AMZN), is Target (NYSE: TGT). The U.S. Food and Drug Administration (FDA) has granted emergency use clearance (EUA) to eight of Abbott’s coronavirus tests, including a new, quick and inexpensive home test. With the support of President-elect Joe Biden on testing, we should expect an increase in revenue there. Teladoc, a leader in virtual medical examinations, saw quarterly revenue soar to triple figures last year. And most importantly, the trend continued even as medical offices reopened and coronavirus cases declined.
Vertex specializes in cystic fibrosis treatments. In fact, the company predicts it will continue to be the main player in this market at least until the late 1930s. Even during the coronavirus, Vertex was able to initiate new patients with its treatments and in the most recent quarter increased its product revenue forecast for the full year. Market leadership and strength in times of trouble make me confident in Vertex for the long term.
Amazon and Target both won last year for their ability to serve customers online with essentials like groceries and cleaning products, as well as general merchandise. Amazon’s delivery system and Target’s same-day pickup and delivery have signed the deal. However, the consumer’s shift to online shopping was not temporary. Analysts predict that online retail sales will steadily increase over the next few years, with or without coronavirus. Hence, these companies – and their shares – will continue to win.
Now, let’s add some dividend stocks to the mix. Here, I’m looking for Dividend Aristocrats, or those companies that have been increasing their dividends annually for at least the past 25 years. This track record indicates that they have the ongoing financial strength and a willingness to reward investors, which are important factors when looking for steady income from a stock. Abbott and Target, which we have already chosen, are both Dividend Aristocrats. I would add too Clorox (NYSE: CLX) is McDonald’s (NYSE: MCD), with an investment of $ 10,000 each.
Sales of Clorox increased in 2020, driven by demand for its cleaning products. That level of demand may not last beyond the health crisis. But I expect revenue and profits to continue to gradually rise. Both metrics have been increasing over most of the years over the past decade. As for McDonald’s, the company’s strength in drive-thru should help as consumers continue to favor contactless experiences.
Next, I’d make two bets: on the author of a coronavirus treatment and on a car manufacturer. While coronavirus vaccine manufacturers have soared last year, companies developing treatments have fallen behind. regeneration (NASDAQ: REGN), for example, it rose 29%. (In comparison, vaccine developer Novavax (NASDAQ: NVAX) increased by more than 2,000%.) In November, the FDA granted the Regeneron antibody cocktail an EUA to treat some coronavirus patients. Regeneron could earn as its cocktail increases revenue in the short term and, in the long run, its seven marketed products could increase revenue and ultimately the share price. I would invest $ 10,000 in Regeneron.
Tesla‘S (NASDAQ: TSLA) the share price continues to rise. But so does the demand for its cars. Revenue has been on the rise for about six years and the annual loss is gradually decreasing.
And even in a 2020 put under pressure from the coronavirus epidemic, Tesla managed to deliver around 500,000 vehicles, following its indications. Once the health crisis subsides, demand and production are likely to increase. So, now I would invest $ 10,000 in this title.
And finally, we have $ 10,000 left. I would have this money available for purchase opportunities that may arise in the coming months. As we know, the investment world is full of surprises, so it’s a good idea to have funds ready for action at any time.
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