Company / Analytics

Analytics, 22 April 2022

The best sectors to invest today – ideas

Finding the right sector to invest or stock to buy is one of the most time-consuming aspects of investing. Yet, it is the most rewarding. The market is filled with many products to choose from – from the thousands of stocks, ETFs to commodities and many others.

The stock market has experienced a wild ride recently, with the increasing number of retail investors flooding into the market. This year, the market has been more lacklustre, with household names such as Amazon.com, Alphabet, Apple and Netflix falling substantially.

Much of the decline has been caused by pandemic induced inflation and supply chain challenges, concerns over the Federal Reserve policy changes, and geopolitics.

Considering the current trends, what are some of the best sectors to invest in? And with so much to choose from, where could one start in today’s market environment? This brief highlights some of the key sectors and stocks worth considering.

Best sectors and stocks to invest in 2022

Green Economy

Concerns around climate change have gained traction in recent times. Governments and the private sector are increasingly heading the call (including from activists) to divest from environment-harming sectors of the economy such as fossil-fuels to green the green sector. In the United States, the Biden administration has made clear its views toward climate change and changes it believes need to take place in the energy industry.

The green economy sector is thus worth investing in today, and many companies focused on clean, renewable energy are doing very well. Some of the best stocks to consider in this sector include those focused on clean energy company, such as those making solar panels, windmills, batteries, renewable or fuels.

In countries like the United States, where the Biden administration and Democrats are expected to pass a major clean energy legislation in the near future, clean energy-related companies are likely to benefit from grants to fund research and development on clean energy products, tax cuts, and increasing demand from consumers.

E-Commerce sector

E-commerce has experienced exponential growth since the outbreak of the coronavirus pandemic. Consumers who would never have purchased anything online unexpectedly resorted to buying everything from groceries, gifts, clothing, and medication online. Many liked the experience and are likely to continue purchasing online even as things return to normal. The e-commerce sector is thus likely to continue booming.

Investments in e-commerce companies such as Amazon, Google-parent company Alphabet and Apple are worth investing considering.

For starters, no company has benefit from the coronavirus pandemic than Amazon. Since June 2020, Amazon’s stock price has climbed from around $2,545 per share to nearly $2,800 per share, peaking at over $3,700 per share in July of 2021. With this kind of growth, the e-commerce pioneer has not only become one of the largest companies in the world, but one of the strongest growth stocks on the market.

Meanwhile, Google-parent company Alphabet Inc is also a stellar consideration. Google controls about 92% of the online search market share. If that’s not dominance, nothing is. Most people who use e-commerce sites (including Amazon) also search for the products they are looking to buy on google. And google makes its money on searches, through online advertising.

Most search results yield four or more paid ads along with organic results. According to Statista, Alphabet controls more than 31% of all online advertising by revenue and accounts for the largest online advertising network in the world. The stock is very much worth a consideration for the books.

The travel sector or stocks

With vaccines now readily available and with most people in the developing world fully vaccinated, the travel sector is likely to pick up in the near future. As more people receive vaccines and as people learn to co-exist with the coronavirus, they’ll be more comfortable and eager to travel after staying home for so long.

The best travel stocks are thus likely to see a strong rebound in the months ahead. The stocks to consider in this sector are those that offer travel, holiday and or entertainment services. Notable examples include The Walt Disney Company. Even if you’ve never been to Disney World or DisneyLand, you likely grew up watching Mickey Mouse or another Disney character bouncing around on your television screen.

Similarly, if you are like entertainment, then you may have gotten rid of your cable for a streaming subscription. Well, the Walt Disney company operates also operates Disney+, a streaming service whose subscriber numbers has been greatly increasing.

Some of the reasons why investing in the Walt Disney company may pay in the long term are the opportunities that the company will reap with Covid-19 recovery and through its streaming entertainment. For much of the Covid-19 period, Disney’s theme parks, hotels, and cruise lines have been struggling as both remain closed. But these are reopening as things stabilise and demand is likely to boom, leading to a significant rebound of the Disney stock.

Similarly, one of the major drivers of Disney’s recent stock growth during the pandemic has been its Disney+ streaming channel. Launched in November 2019, Disney+ had more than 118 million subscribers as of November 2021, up from 86.8 million in December 2020 and 60.5 million in early August 2020.

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