The Pandemic, A Blessing In Disguise?

By Tomas Koolhaas, MBA, Astra Financial Services

Obviously, this doesn’t refer to all the people that have lost loved ones or have been severely sick. It also doesn’t apply to people that have suffered significantly financially because of this health crises.

The above statement is related to the economy. In multiple ways we are better off than before the pandemic. Think of sustainability for example. Trillions of fiscal support have gone to green projects which is creating huge opportunities from a business perspective. Cities around the world are also shifting their attention to making neighbourhoods more liveable and green. Besides that, electric vehicles have become widely accepted and their popularity will only increase further.

Another side effect of the pandemic is an accelerated adoption of technology. During the lock downs much more of our lives was taking place online. Companies and employees have learned to work more efficiently and for many it has contributed to a better work-life balance.

Furthermore, countries like the US are investing heavily in infrastructure. On one hand this is boosting the sector as a whole but it’s also creating many jobs. In addition, it’ll benefit distribution channels and reduce commuting time.

On top of that, all the monetary support provided by central banks has created stability. It’s the first time so much money has been printed, actually most of it has been created digitally, but it has done the job and has created a virtual safety net for the financial markets.

Of course, there are downsides and unknowns as well. Unconsciously, people might work more now they’re able to work from home. Besides that, the barrier between professional and personal life is fading. In addition, doing more things digitally is not necessarily good for your mental state of mind. Furthermore, with the fear of people traveling by public transport due to getting infected, car sales have surged. A significant number of those new purchase has been electric vehicles but obviously it’s still more environmentally friendly to go by bus or train.

Nevertheless, in conclusion, from an economic view point the pandemic has been beneficial in many ways. However, translating these events to an investment standpoint, markets have become more fragmented. Due to aforementioned affairs, specific industries are strongly outperforming others. Actively managed portfolios are therefore what is recommended for investors currently.

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