The Year 2020 & Stock Market

The Year 2020 is a really a bumpy ride, and it does throw many of us out of seats - our comfort zones. Many human lives has been lost and perished not only because of the Global COVID-19 Pandemic but because of its effect to the psyche and outlook of many people.

The COVID-19 Pandemic has proven that the human society is a fragile fabric. It is evident to the performance of the Stock Market early this year. Many business are forced to closed or trimmed down their operations - forced to adapt and forced to lay-out many employees and workers. This has caused many sufferings.

In some parts of the World, there are still domestic and inter-countries strife that has intensified and has been going since years before. The most recent is the Azerbaijan-Armenian conflict. There are also ravaging typhoons that happened in South East Asia, which destroyed livelihoods and homes of thousands of people - particularly in the Philippines.

Leaders tried many things to address the issue of Pandemic, many are directly confronting it thru science, some just waiting for the other countries to have cure and vaccine while trying to minimize the spread of the virus. And there are some who are somewhat do a bizarre approach, by downplaying the effect or severeness of the Covid-19.

But as men are social and sentient creature are capable of adapting to challenges. The effect of Covid-19 is somehow dampened in this previous months. Many business are seen to be recovering, while many are still struggling.

Note: Stock index of the PSEI, it appears to be in the path to recovery

So what can a Stock Market Trader hope for before the end of the Year? What are the types of Industry that they can bank or are there any? What does many analyst think of the Stocks this end of the year will be?

Before we go there, let it be known that in the effort to keep the society in place and surviving in the pandemic. Many country leaders had resorted in using their nation's coffer and when that is emptied they resorted on borrowings. According to many analyst, it will be years before many can regain the losses and if it is not resolved as early as 1 year timeline - the recession may follow.

India, recently have conducted a rally with an estimate of 250M attendants just to show their country's leader the discontent primarily of their farmers, the social class that is providing food to their tables.

In the Philippines, even before the Pandemic, the Agriculture and Food Industry is already having a problem in producing satisfactory results, especially, the Rice Production. It is more severe now because of the effect of Covid-19 and the number of recent typhoons that has caused destruction of many crops.

But there are also industries that grow during this pandemic. Among that benefited on the New Normal are the Telecommunication Industry, Services related to Telecom and E-Commerce. Still, they are outnumbered by industries that has gone below the normal relative strength.

Because of the bearish trend of Stocks this previous quarters of 2020, that has been observed even in NASDAQ and NYSE, Long Term Investors have become defensive on their stocks. Some shifted as a Short Term Trader. 

There is key difference between the two - and that the short term trader comes in and out in a very short time, some staying only for an hour.

We can say that an investor has gone defensive, if they diversified their stocks to types of stocks that that rarely move and is resilient to change. One of which is the Mining and Oil industry.

Note: The Mining and Oil industry has continuously goes up since April up to now. Its in the same level as last year - the trend is still bullish up to Nov. 27,2020

 In last 2 months, there are stocks and industries around the world that are bullish and rallying, bringing euphoria on many investors  and traders alike.

Active Stocks or Stock Market doesn't automatically necessarily means that economy is booming - but certainly that means there are traders that sees potential in being an active in trading. As mentioned earlier, long term investors many shifted to short term trading.

According to Analyst and Observers, Stock Market will be continuously lively until a few days before the closing of Stock Exchange for this year - a period when it is expected that many will be profit taking rather than investing.

The Telecom Industry, IT sector, Mining and Oil, Finance and some services will be a good chips before end of this year. However, be vigilant on the quick movements of the stocks. Basic review of stock's health is still the fundamental before buying or selling it.

If you are a long term trader and still unsure then better wait for next year until the dust has settled. This is a good way to protect equities.

In the year 2021, in the middle of January and February, when the dust has finally settled, the long term play can be put on deck after a careful review -while still being an active trader on active accounts. At the least, the level of the stocks will be nearly the same as it was on 2019 prior the effect of the Global Pandemic.