2021 Investing Trends to Look Out For

With the recent double wins for Democrats in Georgia, and turmoil in DC, there is a lot of speculation about what is in store for investors and our economy in 2021. As we learned in 2020, we need to be prepared to expect the unexpected. With much anticipation for a widespread and effective vaccination campaign, we hope to be able to gather, to get back to the gym and favorite restaurants, and perhaps take that long overdue trip to see relatives. And with regained freedom, still, things are not going back to “normal.” We have learned from 2020, that we also cannot return to “business as usual.” With the jobless rate at a high, at the same time we are seeing many stock prices rise, inconsistencies within our economy will continue. With continued social unrest and divisiveness, we can expect more volatility, both in the markets, as well as in our city streets.

Here I outline five trends to watch out for and participate in as this next year unfolds:

Renewable energy is here to stay

Those companies which are capturing wind, solar, and wave energy, harvesting it, and getting it to the grid successfully are going to have (pardon the pun) wind in their sails (and in their turbines). In addition to Europe, now China and India are making big moves toward cleaner, and ultimately less expensive energy sources. Stocks for these companies are only going up.

Companies addressing energy efficiency will also benefit from the US political climate, as well as the increasing demand globally for greener and more cost-effective energy and lighting. Also, within the renewable energy sector, a largely tech-driven industry, efforts to increase the diversity of the employee base and in thought leadership will go a long way toward building a truly sustainable energy sector.

And while sustainability is in for the long term, do watch out for significant greenwashing efforts in the short term. Some less committed companies that know being “green” is important for their brand will say they are reducing carbon emissions, or that they have goals to do so. Watch for specific targets and actual action. Authenticity and actual execution are also key.

Diversity matters in this time of stakeholder capitalism

While some have been working to address this issue for decades, 2020 showed much of America and the world who stood by watching, that inequality-- particularly when drawn across racial and gender lines-- is harmful for society at large. We are also seeing that inequality is not good for business.

As the power of social media builds, there is no denying, we are in a new era of stakeholder capitalism where building a positive and inclusive company culture is more important than ever. While pressure from investors still matters, companies and brands that do not recruit, hire, promote, and embrace a diverse set of employees risk being called out and boycotted.

Those companies that do not end discriminatory policies and practices (like mandatory arbitration policies) will bring risk to their companies’ ability to execute on their core business plans, and to their stock price. As the 2018 Google walkouts demonstrated, and as momentum from racial events in 2020 builds, employees are prepared and empowered to stand up against discrimination. And when they do, brands suffer. In 2021 we will see more organizing of employees within the tech sector---particularly within affinity groups.

As we saw during the initial phases of the pandemic, treatment of employees and observing their rights is more important than ever to building loyalty necessary for a strong workforce.

As tech and other companies compete for talent, those that can demonstrate their authentic support for Black Lives, and other marginalized and discriminated groups are more likely to win and retain contracts and millennial employees. More and more companies are understanding the need to prioritize building a positive and inclusive company culture. Watch out for an increase in diversity and inclusion efforts within corporations as well as the appointment and naming of Chief Diversity Officers at executive levels.

Cybersecurity is not optional

Our economy is now more tech-driven than ever before. With the pandemic accelerating the adoption of digitization, the need for security of data is at an all-time high and will continue to grow this year. As we continue to learn from 2020, preventing data breaches and cyberattacks are high on executive team priorities.

Cybersecurity particularly for network security, and for messaging, will increase in importance and demand. From healthcare facilities and files to digital banking companies, offering secure methods of protecting data will become essential for most industries.

The office day has been permanently disrupted

While many of us are anxiously awaiting the rollout of the vaccine, so we can see our coworkers in person, sit around an actual conference table, break bread with colleagues and clients, many employees are not excited about returning to a daily commute. Some teams are actually feeling more productive working from home, and many firms small and large have given up prime office space. Companies like Zoom, and food delivery services will still be in high demand even after the vaccine is widely distributed. Do watch for a pivot in business models for leading office furniture makers. Rather than sales exclusively to corporations for office buildings, high-end chairs and ergonomic desk setups for home offices will become more important, as we embrace the hybrid aspects of being in the office on some days, for team meetings, and at home for emails and other autonomous projects.

Women are on the rise

2020 showed us that strong female leaders outperform. From managing countries and entire economies through the pandemic crisis to managing portfolios of equities, the world saw women outperforming in sectors and positions that matter. We also saw how the pandemic exacerbated gender inequities within the home. In the US alone, many women were forced to leave the workforce to care for children and family members, when daycare centers closed and schooling for many went online. As the economy picks back up, we are going to notice the dearth of women in key positions. Companies small and large are going to need to be preemptive in taking measures to welcome them back. As we rebuild the economy, we know that diversity of thought will be essential for producing the continued innovation required to propel us forward. Watch for women in leadership at all levels and watch for companies making significant efforts to recruit, hire, train, and promote women from all backgrounds.