The holiday season has brought so much cheer to investors, with the stock market continuously setting new records and record trading volumes. As we move into 2021, investors are hoping this bullish holiday seasonality continues. As such, investors should consider three value sectors that may bring more gains in the new year.
First, the technology sector is a significant driver of the global economy. With the demand for tech on the rise, companies in the sector are expected to experience rapid growth in 2021. This is especially true in the semiconductor industry, which has been leading with strong year-over-year gains. Moreover, many tech stocks are still relatively cheap, making them a good investment for value-seeking investors.
Second, the financial sector is another value play from the holiday season. After the Federal Reserve lowered interest rates in 2020, many banks and financial institutions took advantage of the low borrowing costs. This enabled many of them to capitalize on the banking opportunities that are expected to arrive in 2021. Additionally, banks and financial institutions are expected to continue benefiting from the liquidation of non-performing loans and expansion of their balance sheets, making them a desirable value play.
Finally, the healthcare sector is yet another area of value that investors should consider for 2021. With the ongoing coronavirus pandemic, the healthcare sector has been a major winner. With more vaccine availability and additional treatments in the pipeline, the sector should see a more stable growth trajectory in 2021 and beyond. This is especially true in the medical device, biotechnology, and healthcare services industries.
On the whole, investors are feeling optimistic about the markets as we enter 2021. With the bullish holiday seasonality promising more gains in the future, investors should consider placing their investments in value sectors like technology, financials, and healthcare. With valuations still relatively low in these sectors, investors can potentially cash in on long-term gains in the coming years.
