Last blog I talked about the implications of a Biden Administration on the stock market, but today we are going to take a bigger picture view of the economic implications of a post-COVID-19 future, and how you should your investment decisions accordingly. So, what are some of the major takeaways?
A Catalyst for Rapid Tech Adoption
This pandemic has flipped our world upside down. Millions of workers instantly lost jobs now that a lot of in person tasks have either been automated or done online. This means that some industries will benefit from this shift such as online shopping, digital payment, telemedicine, videoconferencing, and cloud computing. This pandemic only proved that these business models are here to stay. Companies like Amazon, PayPal, Zoom, Microsoft, and Salesforce will dominate. Businesses have started to adapt to working remotely, and many will continue to do so permanently.
Business Resource Allocations Will Shift
Permanently working at home will have other implications on businesses. There will be less need for commercial property and office space. This is a way companies can cut down on costs, and it would have great implications for their revenue. This land previously used by businesses can be reconfigured for logistics and warehouse facilities which are expanding at an alarming rate to satisfy the consumer demand for online-shopping. Many office buildings in cities could also be potentially repurposed into residential units now that there are not large amounts of employees working in office complexes. There tons more effects this will have on the economy.
A Dramatic Increase in Government Debt
Although necessary, the government relief measures that have already happened and might potentially be administered again has large macroeconomic implications on our countries government debt. Although it is not something to worry about in the short term, our government debt will start to grow at an even more alarming rate after the stimulus. In the long term, there will have to be tax increases and benefit cuts in order to reduce the size of the debt.
What Should I Do?
Although the post-COVID world looks seemingly grim, some changes that have occurred support a positive outcome in the long term outlook. It is important to catch on to these trends by following a few simple rules.
-Invest in a balanced and diversified portfolio across many different assets and take advantage of economic trends
-Focus on innovative companies that embrace that change and have a positive impact on society
-Lastly, plan ahead with the possibility of future higher tax rates and fewer benefits when planning your financial future.
Conclusion:
As this blogging experience comes to an end, I want to thank you for taking the time to read all of my blogs, I hope they have been meaningful in some way. But the journey does not have to end here. Continue learning because it is important for your own personal growth and success. Good luck!