Earlier this year, American investors were in for a shock when inflation surged more than it had in the past decade — something that’s sure to decrease the value of a portfolio. But if you’ve decided you want to start investing heading into the New Year, you don’t need to be particularly worried. As history has shown, stocks beat out inflation the majority of the time.
So if you don’t know where exactly to begin your personal finance journey, at least know this: Due to the pandemic, some sectors have become more worth of investment than others. With that in mind, here’s a list of some sectors to look into moving forward.
With remote work and lifestyles on the upswing, investing in an electronics company may reward you later on. Take Intel (INTC), for example. The company manufactures the components crucial to helping our electronics run smoothly, such as computer processors.
But the company is not stopping there. Intel is currently developing a chip, code-named “Sapphire Rapids,” meant to increase AI performance by a factor of four to eight. And its recent agreement to use SiFive’s RISC-V IP may mean we may see more powerful, yet energy-efficient processors soon. This, in turn, means that the company’s value can only grow over time.
It’s only one example, but it speaks to how electronics companies are adapting to new tech, and why they might as a result be worthy of investment consideration.
Software, and operating systems (OS) in particular, are what allows us to get the performance we need out of our devices. That’s why it’s basically always a good idea to consider investing in companies like Microsoft (NASDAQ: MSFT).
Microsoft’s Windows is the world’s leading OS, and, alongside Johnson & Johnson, Microsoft is one of only two U.S. stocks with a AAA credit rating from Standard & Poor’s. And its earnings-per-share, a metric used to determine how profitable a company is, is expected to increase from 1.95 early this year to 2.32 by the middle of 2022.
It’s said that there are now some 4.55 billion social media users, with roughly 70% of the time people spend online being tied to social platforms. In this sector, Facebook (NASDAQ: FB) remains the most powerful example. Beyond core services, its messaging services, Messenger and WhatsApp, are increasingly pushing text messaging into obscurity, while its marketing algorithms rake in billions every year. And with new features like augmented and virtual reality, Facebook is keeping ahead of the game, making it constantly worthy of consideration.
While we were all isolated at home, many of us turned to gaming to stay entertained, and experts predict that the gaming boom this created will last for years. Mobile gaming is now consistently outpacing PC and console, and even eSports tournaments are drawing larger audiences than the Super Bowl.
But online casino games are the biggest driver of this gaming boom, growing from $44.3 billion in 2019 to $59.2 billion in 2020. As we press on into 2022, they’ll be leading the way for the gaming sector.
One reason for this is the rapid legalization of online gaming. For years, the industry has struggled to get off the ground because of restrictive state legislation, specifically with regard to poker. As of now, only five states support online poker, and that’s the most it’s been since “Black Friday” saw the industry shut down in 2011. However, there’s momentum for further legalization. Sports betting is being legalized in more and more states, and poker and casino gaming often seem to follow –– indicating we could see massive growth in the near future. If you’re looking for specific stocks to explore, Penn National Gaming (NASDAQ: PENN) in is well loved by investors thanks to its vast array of gaming options, giving it perhaps the most diverse regional gaming footprint in America.
Another effect of the pandemic is the massive shift of consumer preferences to e-Commerce. Like with software, if you want to turn a profit on this trend, investing in industry giants like Amazon (NASDAQ: AMZN) may be worthwhile. As the company expands into cloud computing and telehealth, there are definitely many growth opportunities to further boost a stock that’s already outperforming 87% of all other stocks in the market.
Things to consider
The financial difficulties of the last year –– first with the economy shutting down in 2020, and now with inflation –– have led a lot of people to reassess personal financial strategies. Some are focusing on changing habits or developing new ways to save; some have sought additional work to bring in more funds. There are many, however, who have looked to investment markets for opportunity.
If you decide to follow this path, know that it’s always important to do your own research. Make sure you’re making the right decisions for your portfolio based on the most up-to-date information. Provided you’re ready to take this kind of approach though, the sector and companies mentioned above are good ones to start your research with.
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