How to invest for 2021?
2020 is all but over. It has been a tough year for most of us. But what we are thankful of is that most of us are still healthy, and are still in relatively good financial condition.
It could be the first time the most of us experience the market panic and selldown in end Mar’2020. The first time probably seeing our portfolio in darker shades of red.
But as miraculous as it seems, the market did a V-shape recovery and has since surpassed its previous historical high. But as COVID-19 remains a huge concern on the world really going back on track for recovery, what is there for investors to invest for?
As for now, we cannot predict what will really happen. But all we can do is to proceed with caution and still find opportunities for the year 2021. Here are our key assumptions on how we would approach 2021.
COVID-19 will spillover to 2021
Let’s be honest. COVID-19 will not miraculously disappear when the clock strikes at 12:00 while the fireworks go up. As of now, we are seeing news of a mutated strain, just as we thought that pharmaceutical companies have just delivered a miracle vaccine within a years time frame.
So with a mutated strain, will the vaccine work? And how should investors position our investments for 2021?
The only certainty about the market is the uncertainty
At Kaya Plus, we do not play the roles of harbinger or predict the future. Nor do we take advantage of company share prices that go up on heavy speculations. If it is able to go up too much without a reason, it will also fall down a lot without a reason.
Why are share prices of glove companies trading at a steep discount versus their bumper forward Price to Earnings ratio? What happened to Price to Earnings ratio of 40 times, 60 times previously envisioned by the glove bulls?
The market is uncertain as always. And it will be more uncertain when the more certain most of us are.
Contrarian is the best when it comes to handling the herding mentality.
Great companies will continue to do better
2020 was a year where we saw a large difference between traditional companies versus tech companies. We also saw the effects of a resilient business model versus those that are still in a dire state due to the pandemic.
So, that means that there are still opportunities. There are companies which manage to grow their topline and bottom line during this one in a lifetime crisis. Some companies prosper and grew as their products and services were catalysed by the need of digitalization and technology. There are traditional but resilient companies perform due to increased consumption and sales as well.
Some companies will rebound and recover for 2021
There are a handful of companies bearing the brunt of the total lockdown back in the early parts of 2020. As most hard lockdown eases in most parts of the world, things are slowly recovering for some companies.
And in some circumstances, these businesses are deemed as necessary to continue to operate. Hence, there are companies that are due for an eventual recovery in terms of performances after taking a huge beating from the hard and total lockdown.
Introducing Stock Plus 2021
We at Kaya Plus will be launching a selection of 10 stocks that we think would recover and still grow even though 2021 might still remain a huge mystery. These are stocks that we currently own, but are still positive on its long term prospects.
It can also be stocks that we are looking to acquire due to the attractive valuation due to irrational short term price movements.
But do note, that Stock Plus 2021 is not your gateway to getting rich quick overnight. It is just a selection of 10 great companies that Kaya Plus will be looking forward positively on their growth and recovery not just in 2021, but in the years to come as well.
Put simply, great companies that have great business models, which can continue to recover and grow for the many years to come.
Interested to find out more about Stock Plus 2021? Check it out here with our latest offer HERE
See you in 30th & 31st January 2021!