The Trend is your Friend
New Calendar, Same Game.
Every year the calendar flips and the financial news cycle continues. The articles showing top picks and strategies for the year can provide insight and some great performers. Spoiler: This isn’t that. It appears as if the trends established in 2020 will carry over into 2021. There may be some pressure on technology due to elevated valuations, however as a long term investor, technology can’t be ignored. The change in the political backdrop is setting the stage for already emerging trends to catch additional momentum. We continue to look for names in secular and emerging trends which fit our portfolio’s strategy.
Of those emerging trends with strong tail winds, the climate comes in at number one. We are seeing many exciting companies enter the public markets and it's keeping us busy! Investors must remember that a rising tide raises all boats. Not all companies are created equal, there will be winners and losers even in sectors which promise secular growth. The hot sectors like Renewable Energy and Electric vehicles have a long runway, however caution is recommended as the recent move up presents downside risk if entering positions at these levels.
This brings us to the “Spac Attack”. The market has a habit of grouping companies that have any similarities. There is speculative behaviour happening in this space, we understand that. However, there are excellent companies being brought public via this method. Your investment is as good as your due diligence. Don’t let broad based headlines scare you away from quality companies.
Whichever way we look at the market, there will be an opposing view. The change has presented itself and will continue to do so. We don’t encourage people to chase stocks, or jump in just because. Take your time, evaluate your options and make the decision you think is right for you.
The debate of value vs growth will always find its way into the conversation. With how the market has been, I think this type of discussion is warranted. We continue to like innovative technology and disruptors here. We all trade differently, with different time horizons and beliefs. These types of conversations are not meant to have one derail their plan. Make sure your plan is right for you and stick with it, but remain dynamic enough to understand when changes need to be made.
From Conviction Invest, we wish you the best of luck in 2021 and we’re here to help. Our investment discord aims to provide investors with the tools and resources they need to be successful. Use the invite link below to check it out.
