Top 10 Investment Themes For 2021

Happy New Year, everyone! 2020 was a year like none other on so many different fronts, and I am sure that we are all happy to turn the calendar page to a new year that is hopefully filled with good health and some form of a return to relative normalcy. As you may recall, our overall theme for 2020 was initially, “The Year of the 3 Big E’s” – Earnings, the Economy, and the Election, given the interconnected nature of these three factors. However, 2020 quickly turned into the “Year of the COVID-19 Pandemic,” where stocks and the economy were initially devastated by the lockdown measures that were put in place to help limit the spread of COVID-19 and later staged remarkable recoveries into the end of the year.

As effective vaccines and therapeutics are now becoming available, we believe that the overriding macro theme of 2021 will be “The Reopening of the Global Economy.” In this regard, below are our “Top 10 Investment Themes for 2021” for your review and consideration, remembering that while 2021 may turn out to be less volatile than 2020, the days of heightened bouts of volatility are certainly not behind us.

1. Areas of COVID-19 Leadership Continue through 2021 – how humans and businesses operate and interact continues to evolve, and that rate of change has never been quicker than it is right now. This evolution has occurred in areas including technology, commerce, and health care. We contend that the already rapid evolution taking place, combined with the force of change brought on by the COVID-19 pandemic, will allow the areas of technology, commerce (notably E-commerce), and health care to continue to provide economic and market leadership for years to come.

2. Expect more Innovative Healthcare Solutions from Biotech – the COVID-19 pandemic served as a painful reminder of the need for innovative healthcare solutions worldwide. However, healthcare innovations were needed before the onset of COVID-19 and will likely still be required to help treat and cure other rare and chronic diseases in the future. These innovative solutions typically come from smaller-cap Biotech firms, which are then pursued as take-over targets by larger-cap pharmaceutical companies. We don’t anticipate the rate of Biotech mergers and acquisition (M&A) activity to slow down considerably anytime soon.

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Disclosure: Hennion & Walsh Asset Management currently has allocations within its managed money program and Hennion & Walsh currently has allocations within certain SmartTrust® Unit ...

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