TruePoint Capital

Some shrink in the face of adversity and some face it head-on. How will investors respond to a Post-COVID world? How will they adjust to the new “normal?”

Some have responded to the pandemic by retreating to their homes – minimizing social interaction and going out in public and working from home. Many won’t resume normal activities until it’s completely safe to go outside.

Some investors have responded in the same way – cashing out and sitting on the sidelines until they feel it’s completely safe to get back in the investment waters.

COVID-19 won’t be around forever. With looming vaccines slated to be available to the public soon, the end may come sooner than later.

What is the new normal? What will the Post-COVID business environment look like? What can we expect in the near-term and long-term? What are some trends we’ve seen spring out of the pandemic and what trends can we expect to see in the future?

Here are some guesses:

  • The next round of stimulus checks will put a shot in the arm of the economy.
  • Interest rates are expected to remain low.
  • Entrepreneurs who saw their businesses closed will look to new ventures.
  • Lost jobs and businesses will inspire a new generation of entrepreneurs.
  • Remote learning and working will untie students and workers from a fixed geographic location.
  • Expect growth in the “virtual experience economy” where goods and services are marketed through virtual reality.
  • Shopstreaming – the convergence of e-commerce and live streaming – will grow in prominence to sell anything from groceries to real estate.
  • A-Commerce – AI-driven shopping experiences – will grow.
  • Further convergence of living, work, and learning spaces.
  • Increasing the comfort of consumers with living in a world that takes place largely online.
  • Even as many aspects of life become more remote, there will be many individuals looking to get out in public again for social, religious, athletic, and entertainment events.

Fortune favors the bold.

COVID has altered the business landscape but it didn’t decimate it. Opportunities will still abound. Some will be new opportunities and some will be industries catering to needs that never went away – food, shelter, health, etc.

The country and the economy will move forward and in the world of investing, the mistake many investors make is to stay on the sidelines too long and miss out on opportunities – new and traditional.

Waiting is not always a good thing. 

The myth many investors buy into is that there’s no harm in inaction. Investors who choose to do nothing are actively deciding to stay the strategic course they’re on, which is to deprive themselves of income-generating opportunities. On top of that, sidelining cash only erodes it because of inflation.

The world has changed… true, but opportunities haven’t ceased. I’m not advocating diving into the first investment that crosses your desk. You should still cling to economic fundamentals.

I will still seek out opportunities in the private markets with low correlation to Wall Street and the broader economy.

I will continue to insist that a business or asset have intrinsic value – value separate from what people are willing to pay for it and value generated from cash flow operations.

In a post-COVID world, the opportunities may change but the fundamentals shouldn’t.

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