Long-term Trends for 2021

Summary:

  • Focus on either Momentum trends which are well-established, and which have strong structural drivers; or
  • Contrarian reversals of long-existing bearish trends, which have now turned bullish and which have plenty of upside potential.
  • A word of warning: Momentum trends are always at risk of suffering should equity markets correct, so require relatively high risk tolerance.
  • Momentum trends include subsectors of Tech, Biotech/Medical Diagnostics, Clean Energy
  • Contrarian reversal of bear trends include: Commodities, notably Base Metals, Precious Metals, Agricultural
  • UK Stocks are also a contrarian call on a global context:I prefer Small-Cap and AIM exposure for exposure to the expected UK domestic recovery

What long-term trends can investors focus on this year?

Here we're going to look at some long term trends that could work well in terms of investment themes for 2021. There are two selections I've tried to make here:

  • Firstly, those trends that have really worked well in 2020 that I believe could work well. Again, in 2021, in a continuing momentum fashion.
  • Secondly, I'm looking at significant changes of trends, from downtrends in the long term to long term bear markets that are now turning into bull markets. As of the last few months. The idea here is to be more contrarian in terms of theme selection.

Momentum Trends: Tech, Biotech/Diagnostics, Clean Energy

So to continue looking firstly at momentum trends, clearly, momentum has been strong in a number of sectors, namely technology, biotech/health care diagnostics, and clean energy. So these are the three sectors that I concentrated on, for momentum, ideas for 2021.

Favoured technology subsectors

If we first take technology, I am less convinced that mega cap tech in the US will continue to perform as well as it has in 2020.Having said that, there are certain areas of technology and related to technology that I think will continue to perform well.

These include:

  • artificial intelligence,
  • video games,
  • cyber security, and
  • semiconductors.

These are the secular themes that I believe will continue to work well, and which continue to have strong momentum even into January of this year.

Tech subsectors I like for 2021

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Source: tradingview.com

The ETFs one can look at for these themes include:

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