Everything in our lives is changing at an exponential rate. As the coronavirus pandemic and advancements in technology usher in a new digital age, it wouldn’t be a surprise if in fifty years manual labour was made redundant altogether. Therefore, companies are having to alter how they operate, because they risk being left behind otherwise. However, the brilliant thing about the new world is the new opportunities for business it has created. As such, investors are changing their tactics, so they can capitalise on the digital era and post-pandemic world. Read on if you want to know how they’re doing it.
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Topping Up Holdings
As a result of coronavirus, thousands of companies have seen a drop in their share price. However, these drops don’t necessarily reflect the value of the company; it’s perfectly feasible that their worth will increase again once the pandemic has passed. As such, smart business investors are racing to cut in or top up their current holdings whilst the share prices of these luxury brands are so low. This is a perfect example of the classic investment strategy: buy low, sell high. This tactic requires patience. You won’t immediately reap the rewards because the company you’ve invested in will need time to recover and grow again. But once it does, you can receive profit that’s tenfold what you originally deposited. As such, financial investors are benefiting from COVID-19 by topping up on their holdings whilst the share prices of different companies are low.
The Technology Industry
Social distancing has resulted in companies changing how they conduct their business. People are working from home instead of their office; factory workers can no longer be close to one another; restaurants are changing to food delivery services. The list goes on and on. Therefore, developments in the technology and engineering industries have seen a massive acceleration, because people are relying on them now more than ever before. As such, investors are capitalising on this digital movement by bringing funding to these sectors. For example, Ben Rogoff is now investing in automated manufacturing because of the impact social distancing is having on factories. Meanwhile, the entrepreneur Tej Kohli has started funding companies that develop robotics, as the world continues its shift towards technology. It’s ostensible how investors are benefiting from the technology and engineering industries during this transitionary time.
High Risk for High Reward
Many investors are playing it safe by pouring capital into companies they know will survive the pandemic. However, business is a game of risk and reward. As such, some investors are taking a real gamble and investing in the travel industry, which has been worst hit by the pandemic. They do so because they anticipate there will be a sharp U-turn. Travel could increase once people have the freedom of movement again; the surviving travel companies will likely have no competition and resultantly become incredibly valuable commodities. But there’s also every chance they’ll collapse completely, hence them being high-risk vs high-reward investments.
Those are the main ways in which investors are attempting to capitalise on the digital age and pandemic. In these uncertain times, will you take a chance yourself?
