The Endemic and Your Investments

August 19, 2023

The Endemic and Your Investments

It has been two years since COVID-19  hit the United States.  Unfortunately, despite the fact that two years have passed, the virus is gaining momentum rather than slowing down related to the newest strain, referred to as Omicron.

This is the most contagious variant of the virus as of yet; however, the mortality rate associated with this strain seems to be significantly less than that associated with previous strains. It is the hope that herd immunity will be established via those who have vaccinated and/or via those who have gained natural immunity from having acquired the illness. This could transition COVID-19 into endemic disease.

It must be noted that the seriousness of the virus cannot be downplayed. Many people have lost their lives to the virus, or have suffered severe, long term complications from the virus. These last 2 years have been very difficult on so many people. Yes, for some people, the virus was nothing more than a sinus infection, but for others it has caused irreparable damage.

The big question is what will happen to my stock portfolio if COVID-19 transitions to endemic status?

1. The economy will be running full speed ahead so the FED will be forced to tighten and hike interest rates to slow down inflation. This will benefit the financial sector as there will be more profitable lending at a higher margin.

2. There will be growth in the leisure sector of the market like the travel and cruise industry, as well as the airline companies. This was a very hard hit sector with companies losing billions due to the far reaching impact of the virus.

3. The healthcare sector will also thrive because the stress on the system will diminish and companies will have lower operating costs without all resources being directed towards COVID-19. All elective procedures that were delayed will be able to be scheduled.

4. Energy will be one of the best investment opportunities. With the booming economy and the world coming back to ‘normal’, more energy will be consumed.

5. One sector that will be impacted negatively will be online services that thrived during the pandemic, like online shopping and homebound exercise equipment.

Overall, we expect a major uptrend in the markets with the transition to life like we knew it pre-pandemic. Most importantly, with the rapid rate of transmission of Omicron, it is our hope that you, your family, and all your loved ones stay safe.