Ask a gardener and they will tell you that disaster can strike your plants be they vegetables or flowers at any time. That is precisely what is happening today with our investment portfolios. COVID-19 is just such a disaster. Also, as many growers know the impact of disasters will pass with time. So it is, with the pandemic that is devastating our retirement investments.
I am not suggesting that you close your eyes and do nothing. A V-shaped economic recovery will bring things back to normal if it occurs. However, some business ventures will not recover, certainly not in their present form. Social behaviour may change particularly if a vaccine is not found soon. But change can simply result from people discovering preferable ways of conducting business. New social norms may develop which in turn change the way that business is done. And this will impact on how you invest your savings.
Anyone who tells you how dramatic the effect on world economics will be is not being genuine. No one knows at this stage. What I and other pundits say is at best an educated guess. That being said I think that certain industries should be viewed in a new light. The following are my thoughts today. Tomorrow they may change.
Transportation will be different. There will be less demand for it as virtual communications increase in frequency and use. Why commute hours each day to work when virtual groups can function adequately using modern technology? Working from home should become more common. This will not only have an impact on the automobile industry and crude oil production but public transit may switch to more of a demand-based model. Perhaps government provided Uber will emerge. In some jurisdictions the private sector will dominate.
Also vacation travel might look quite different. Large cruise ships packing people in like sardines (excuse the pun) may have to adapt to a different model involving smaller groups and more social distancing. The way that develops exactly will present opportunities for forward-thinking investors. Building larger aircraft to hold more people in closer quarters should be looked at carefully. The trade-off between cheap travel and healthy travel will be interesting to watch. Small group travel may prove better for both healthy living and vacation serenity.
As the population of the world increases so does the need to avoid the madding crowd. Large groups of people should be avoided not only defeat viruses search is COVID-19 but future disease outbreaks which are not pandemics but still deadly. Change is usually thought to occur gradually in nature but sudden, abrupt change can occur. This pandemic may bring about just such a phenomenon. How this change will take place is uncertain at this time but I think that we will see a more enduring change in the way we live as a result of this pandemic.
I plan to explore this topic further in future posts along with what it may mean for your investment portfolio.
