stock market

7 Things That May Affect the Stock Market in 2021

Investing is a tricky thing. Investing usually involves a lot of risks. It doesn’t matter what type of investment you make — time, energy, relationships, money — you are not always guaranteed a good return for your investment.

For instance, if you make an investment in putting up a business and it turns out to be a success like a company that creates a reliable local business directory software or an HVAC repair service provider, then you’ve got a good return on your investment.

But not all investments are guaranteed success. Take for example making emotional investments in the wrong person. Or spending a lot of time doing the wrong things or ones that cannot contribute to your growth and development as a person.

This brings us back to investments being a tricky thing. Especially when it involves money. So if you’re considering making an investment in 2021, you might want to consider the following trends that experts are predicting.

7 Factors that Will Affect the Stock Market and Your Investments in 2021


1. President-elect Joe Biden

With a new president coming into the Oval Office, expect that there will be certain changes and priorities in the country’s economic and financial policies. With President-elect Biden’s plans on increasing taxes for the wealthy and the potential impact this move will have on stocks, the market seems to be reacting favorably to Biden’s triumph.

2. COVID-19 Vaccine

With the COVID-19 vaccine approved and gradually distributed to the states, the rate of the decline of COVID cases in the country will certainly have macro-economic impacts and will affect every investment sector, not sparing one.


3. Pharmaceutical stocks will go up

Because of the approval and distribution of the COVID-19 vaccine, investors will want to take a closer look at pharmaceutical stocks as the most obvious choice. However, other companies involved in its distribution will also benefit so investors might also want to check out these companies.

4. Gold rush for travel stocks

Apparently, a lot of things are riding on the success of the vaccine. If the world soon returns to normal by mid-2021, we could be looking at a great demand for travel that will drive a clamor for airline stocks, cruise lines, and hotels.

5. Folks will be hungry for restaurant stocks

The same thing is predicted for the restaurant and fine dining industry. Pfizer’s announcement of its vaccine’s 90% efficacy on its third phase trials, chain restaurants had a widespread rally and saw double-digit percent gains that very same day.

6. Remote work stocks will take a plunge

One of the sectors that will definitely be affected is work-from-home related stocks, such as Zoom (ZM). When Pfizer announced the success of its vaccine, Zoom lost nearly 20%. Although stocks like these aren’t going anywhere anytime soon, investors should give serious thought when making investments in them.

7. Tech stocks will slow down

Analysts have long predicted the tech stocks’ bull market to come to an end. It had an excellent run in 2020 but is expected to slow down in 2021. One of the things that will probably affect this is the antitrust litigation against Google (GOOG) and other industry giants.

It is still unsure how the Biden administration will handle the lawsuit filed by the Trump administration at this time. This is one of the ways that the Biden administration can affect the stock market in 2021. We’ll just have to wait, see, and hope for the best as the transition takes place.

When it comes to investing, it is best to do your research to make sure you have all your bases covered. This allows you to make a well-informed decision so you don’t waste your hard-earned money on something that won’t give you any good returns. Be wise with your wealth.

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