Our world has changed more, and more quickly, in the last year than ever before, and the stock market is no exception. After last year’s market swings, the question for 2021 is “where to go from here?” Perhaps more specifically, “where should I invest to achieve the greatest risk adjusted returns?” With the market at all-time highs and prices ballooning, it can be a daunting task to find a stock you can trust. Here are some companies that you should keep on your radar in 2021.
Airbnb in 2020 was simply the right company at the right time. While Covid-19 ate traditional hospitality stocks’ lunch, Airbnb thrived despite the pandemic, and is already up a whopping 200% from its December IPO. Airbnb currently boasts over 7 million worldwide listings on its site, almost double the number of traditional hotels like Hilton, Marriott, Wyndham and Intercontinental combined. When a company continues to grow despite a global pandemic, you can be certain it will be a disruptive monster in the hospitality field as the economy continues to recover. As additional economic stimulus comes in, look for consumers to spend more money traveling with the much safer Airbnb than traditional hotel services.
Innovative Industrial Properties is a rare unicorn in the market today: a high-yield REIT and an explosive growth stock. This real estate investment trust owns properties related to the booming cannabis industry, which has recently seen a second wind in terms of valuation. This stock allows you to gain exposure to the growth of that field (and all the capital appreciation that brings) with much less volatility, since you’re “selling shovels in a gold rush,” as the saying goes. Combine that with a hefty 2.34% dividend yield, and you have a recipe for wealth.
Covid-19 has accelerated our entire global society towards increased digitization. A problem many Americans faced in 2020 was the uncertainty of whether they should see a doctor for a non-Covid related reason when being in public meant increasing your risk of contracting the disease. Teladoc Health is a company that provides a solution for that problem. Teladoc’s telehealth services allow patients to consult with health professionals in nearly any field, from pediatrics to mental health, from the comfort of their own home. This trend is sure to continue as Covid continues to evolve. The company itself is still aggressively growing, both in assets and in price. Their recent acquisition of fellow health giant Livongo last year demonstrates that they’re committed to capturing a dominant share of this emerging market sector.
This online finance firm founded by Elon Musk and Peter Thiel has been on a roll, having gained almost 160% in stock price over the past year, and is showing no signs of slowing down. The company is adapting to the changing climate in finance and e-commerce, serving over 360 million digital wallets, including the ability to buy and sell cryptocurrencies. The company itself, according to CFO John Rainey, is currently raising capital in search of new acquisitions that will complement the company’s strengths. While bearish investors may balk at the company’s high price to earnings ratio, this may just be the tip of the iceberg for Paypal.
Social media has boomed in 2020, and the trend is only continuing to accelerate. While Facebook and Twitter battle endless political controversies, diminishing public perception, and in Facebook’s case even anti-trust legislation, Pinterest has been quietly raking in millions on the sidelines. Its userbase has grown over 37% in 2020, and will soon eclipse half a billion active users. As the social media platform’s focus is on creators and sharing ideas, it’s easy for them to monetize their fast growing userbase. Perhaps most importantly, the stock is completely innocent, and unlikely to be mired in public (and costly) controversies introducing volatility to the price.
For the most conservative investor looking to still make great returns with the absolute lowest market risk, there’s always VT. This isn’t a single stock, in fact, but a collection of stocks sold under one ticker. This particular collection of sticks is a market cap-weighted list of every public company on Earth. For this asset class, you literally cannot be more diversified than this. Being totally diversified, this index fund makes a fantastic backbone for any portfolio. It’ll help keep the gravy train rolling in up markets, and help soothe the sting a bit in down markets. in 2021, expect this index fund to perform as well as it always has: comfortably well. As far as investments go, there is nothing more trustworthy.
That concludes this list of stocks to look for in 2021. As always, do your own due diligence, but look for these tickers the next time the market is flashing all-time highs, because they’ll likely be there.