Upcoming Top Stock Sectors of 2021

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To say that 2020 was a rough year would be an understatement. With the COVID-19 spreading and running rampant, millions of people around the globe were forced to find alternative ways to earn money. Life quite literally halted, and several sectors of the society struggled with countless businesses and other forms of livelihood sadly closing.

Upcoming Top Stock Sectors of 2021

Many of us badly needed to find creative ways to earn money. A lot of people turned to online and/or digital content to generate income, while others discovered investments and stocks. The idea of stocks allured even more people, giving hope and a little bit of security for the future. For those who are new to the game, going down that rabbit hole could be quite overwhelming. There’s so much to learn and knowing where to begin can be tricky.

So here are a few of the top sectors that will most likely dominate the stock market in 2021:

1. Dividend Stocks

Dividend stocks are not guaranteed, but investors looking for best dividend stocks or generous yields usually pay close attention to a company’s ability to send cash to its shareholders. Some examples of companies that offer great dividends are 3M and Alliance Bernstein. These companies are called dividend aristocrats. Dividend aristocrats are companies that continuously increase their dividend payments and are a member of the S&P 500.

2. Technology Stocks

With the incredibly fast and continuous growth of technology, there is no surprise this stock sector is number one on this list. Tech stocks have been considered as one of the best performing stocks in the past two years. With the emergence and continual development of artificial intelligence (AI) and even virtual reality, there is no sign of slowing down for the tech sector. Tech stocks are basically entrenched within our daily lives, it’s impossible to ignore. Examples of tech stocks are Apple, Microsoft, and Adobe.

3. Consumer Discretionary Stocks

Consumer discretionary is the goods and services people are willing to spend money on when they have some extra cash to spare. Consumer discretionary companies like Starbucks and Amazon have an exceptional customer base and loyalty. Alongside its ever-growing sales, even during the pandemic, these companies are proven to stay for quite a while. Another example is Tesla, which is making waves in trading especially with Elon Musk being vocal about cryptocurrency.

4. Financial

The financial sector has been a major leader related to the market. Banks, though, took a hit during the pandemic but can manage and endure the after-effects of COVID-19. Heading into 2021, the financial sector may be able to give back to shareholders with the help of capital return increases. In addition, banks are well placed for stock dividends, which are a great way to expand shareholder rewards. This in turn, would be good news to investors.

5. Healthcare

COID-19 tested the healthcare sector the most in the past year. The investment governments allocated into public healthcare would most likely be long-term. In addition, the reasonable and inexpensive assessment for stocks has the most potential for healthcare stocks. With the surge of innovation—the development of drugs, infrastructure, and devices—this will surely provide great opportunities in 2021.

6. Industrial

The industrial sector is directly tied to the economy and with the rise of challenges like insufficient infrastructure, population, economic growth, and climate change, requests for support all around the world are on the rise as well. As these demands rise, support is most likely to come from the private sector. Industrial companies will be able to provide innovative solutions with products and services at fast rates. The industrial sector has numerous opportunities ahead.

7. Energy

Renewable energy is the latest trend and as costs decline over the past years, it will stand on par with the coal and oil industries. The energy sector is getting more recognition from all over the world with the aim to prevent even more damage to the environment. Companies that are primed to take advantage of the transition to renewable energy are believed to remain and be relevant for a long time. It is believed that it would remain competitive in years to come and in turn, reward and return significant capital to a lot of shareholders.

Trading and investments in stocks can be a risk. With enough knowledge, it could yield extremely great results. As we enter a new year, 2021 is showing great opportunities and there is surely so much to look forward to. For more information about 2021 stock sectors, check out this article at Fidelity.

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