I'm Not Banking on Full Normalcy Returning in 2021

I hope the Real Money Pro community all had a fabulous Turkey Day. Like everything else in 2020, celebrations in many parts of the country were surreal with many states choosing to put restrictions on how many individuals and who we could invite into our homes for this celebration. Most people in the nation would like nothing better than a return to normalcy in 2021. The market is rallying in part on those expectations. My view is we are likely to be disappointed on many fronts. Politically, the new administration is likely to face the same sort of fierce resistance from the opposition as did the previous administration. There will be no honeymoon period, albeit they will get a much more friendly reception from the media. Parts of our lives and how we live will not return to how they were either. Today we explore some recent trends that are here with us to stay for the foreseeable future. Online grocery shopping has surged over 50% since the beginning of the pandemic. This certainly has been good news for Whole Foods and not so much for those grocery chains without a robust online ordering and delivery system. I am one of these converts as I have gone from always getting my groceries in person to now receiving over 90% of my supplies via ordering online. It is a little more expensive but that is more than made up for in reduced opportunity cost and not dealing with the crowd at Whole Foods, where three out of every four people seem to be 'pickers' these days. My new loft in Delray Beach is currently being renovated and refurbished. The new place now will include a small area for a home gym that will include dumbbells, kettle weights, mats, an exercise ball and a 'Mirror' home exercise portal that will hang on the wall. I never want to be prevented by the government from going to my gym again. How many millions of my countrymen are doing the same or planning to do so? This trend should continue to benefit the likes of Peleton who has had some trouble keeping up with orders as well as others in the space. The exodus out of large, high tax and high-density cities like NYC will also continue in 2021 even if it might not be at quite the same pace. Over 300,000 households have moved out of the five boroughs of the Big Apple since March driven by a surge in crime, waves of new homeless, boarded up stores as well as major restrictions on restaurants, religious services, etc. New technology is allowing more and more knowledge workers to be employed virtually. This obviously will have major impacts to commercial real estate in the city as well as the businesses that depend on these workers to actually be in an office. I just got back from a week in Charleston scouting out possible residential real estate investments in this charming small city with an amazing food scene. It seems every time we stopped for lunch or dinner we ran into one or a couple of New Yorkers or Bostonians on similar missions. We were told that 30 new people move to Charleston every day. That is 10,000 new residents annually. Pretty significant when the population of The Holy City is listed at just under 150,000. This wave of migration has been very good to my home building stocks and housing related equities I have highlighted throughout the year as this trend became very apparent after the first wave of lockdowns. I wouldn't be buying most of them at these levels given their large rallies. However, Beazer Homes would be one name I think still has decent upside even with its recent rise. And those are some thoughts on trends that will continue in 2021 as we struggle to return to the lives we knew before the pandemic. We will get more granular in our picks off these trends in coming columns. With that, I wish the Real Money Pro community a safe and hopefully relaxing rest of the holiday weekend.

I'm Not Banking on Full Normalcy Returning in 2021

The exodus out of large, high tax and high-density cities will continue in 2021 even if it might not be at quite the same pace.

Columnist Conversation

We Added to a Position in the Stocks Under $10 Portfolio

S&P Futures

10-Year Note Yield (LT View)

COLUMNIST TWEETS

Please Join or Log In to manage and receive alerts.