We think that a storm is a good analogy for COVID-19. It came through and shattered lives, jobs, and entire economies. And while we’re certainly not at the end of the pandemic, we seem to have reached the point where we expect things will gradually improve over the months ahead.
Thanks to many individuals’ hard work, e@ective vaccines are available and their distribution is ramping up. And, as is the case after a major storm, when we Onally put the pandemic behind us, we don’t believe the world will reset to where it was. We expect it will be somewhat di@erent.
It’s that changed landscape that we think investors need to prepare for now.
What will the new investing landscape look like?
At the Wells Fargo Investment Institute, we’ve been spending a lot of time thinking about the conOguration of the new landscape. Although we haven’t seen a pandemic on this scale for over a hundred years, we do think that we can learn from other similarly disruptive periods in our history.
As we’ve worked through di@erent scenarios, I was interested to see that several trends began to emerge that favor areas of focus for me early on in my career, among them commodities. Driving these trends is a drop in supply as weaker companies have gone out of business and cheap debt. Access to low-cost debt has allowed smaller companies to invest in new technologies, suggesting that they may emerge from the pandemic in a stronger position to compete.