Five Investment Opportunities To Keep An Eye On

This year hasn’t been the most profitable for many companies, but times of strife are also times of opportunity, and the following markets have been performing above expectations despite challenging global economic circumstances.

Gold

When times get tough, there are generally two things pessimistic investors turn to: gold and property. The latter has not fared well in 2020, with more and more people spending the majority of time at home and economies struggling everywhere, the global property market has taken a real hit this year.

Which leaves gold as the star performer throughout 2020. The reason for this is that gold is generally seen as a safe haven in times of uncertainty, whether it be financial or political. Gold also has a history of moving in the opposite direction to volatile markets, so depressed markets often mean rising gold prices.

There is a caveat here, though, as the price of gold may have peaked in August and, with other industries showing some signs of life, it may not offer the same growth potential it did six months ago. However, gold has been seen as a safe bet for so long for a reason.

Fintech

While many industries have struggled this year, financial technology is not one of them. Private investment in fintech firms has continued to rise throughout 2020, and that is only expected to continue in the short and medium-term future. Fintech firms that have a strong focus on business to business solutions are most likely to thrive over the next six to 12 months.

The biggest and best example of this trend is the success that PayPal has seen this year. The online payment services provider has set company records for total payments volume, new account sign-ups, and total revenue in what has been a genuinely blockbuster year for the company.

While PayPal has traditionally focused on peer-to-peer money transfer, its success this year has allowed it to branch out into new areas and strengthen its platform in others, such as business to business tools, credit facilities, and even cryptocurrency capabilities.

Online Entertainment

With so many people spending a vast majority of their time at home these days, it comes as little surprise that companies that specialise in entertaining people online have done very well in 2020. This success has been shared across several industries. Film, television and gaming have all seen growth, but a couple of companies have stood above the rest.

Netflix, for example, added more new subscribers in the first three quarters of 2020 than it did for the whole of last year combined. The total is believed to be more than 28-million added paid subscribers in the first nine months of this year.

In gaming, Evolution Gaming and NetEnt both reached an impressive high with their Q3 revenue. NetEnt are one of the top slot providers with a large online slots selection which helped its revenue grow by 18% in the third quarter year-on-year when compared to the same period in 2019. Its income reached $60-million, which is around double the figure reported for Q3 last year.

Digital Advertising

This area is a really interesting one because people have been waiting for a major shift in advertising. While it is happening gradually, it hasn’t been the complete advertising budget takeover that many were expecting with the decline of the print industry.

The big issue with advertising online has always been about reaching the right people. Having 10 million page views is one thing, but if half of them are bots, then advertisers would be wasting money. It’s why Google’s advertising solutions have proven to be so popular in the space because they have robust market analytics to back up their promises.

This fact has come to the fore in 2020 as Alphabet, Google’s parent company, beat revenue expectations across the business but was primarily driven by strong advertising growth. The company’s stock price rose almost 9% when the news broke that it had beaten expectations for earnings per share, revenue, YouTube ads, traffic acquisition costs, and Google Cloud fees.

“This year, including this quarter, showed how valuable Google’s founding product, search, has been to people,” said CEO Sundar Pichai in the earnings call.

 

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