Change has been among the only constant for investors during the past two years of the COVID-19 pandemic.
Today marks the second anniversary of the World Health Organization declaring COVID-19 pandemic. The lockdown of businesses and economies around the world soon followed. Economic growth ground to a halt.
The US economy subsequently entered a recession in February 2020 that lasted until April of that year, according to the National Bureau of Economic Research.
Stock markets globally took it on the chin, hard.
The Dow Jones Industrial Average tanked nearly 35% from mid-February to March 16 as COVID-19 infections and deaths spread. Even an often teflon stock such as Apple was not spared – it plunged 30% from mid-February to mid-March of 2020.
In total, there have been 452 million cases of COVID-19 worldwide and more than 6 million deaths, according to WHO.
While many large companies are preparing to return to offices this spring and economies and stocks have rallied back thanks to COVID-19 vaccines and boosters from Pfizer and Moderna, the imprint of the pandemic on life and markets remains very much top of mind.
Here are three things that the pandemic changed for investors.
1. Rise of the retail investor
Armed with more time on their hands amid office closures and layoffs and fresh stimulus checks from Uncle Sam, the market welcomed scores of new retail investors.
Those new to the market gravitated to what they knew in their everyday lives, buying up shares of video game retailer GameStop and movie theater chain AMC.
Frenzied trading activity ensured on upstart brokerage platforms such as Robinhood (which went public in July 2021), ultimately helping to create the Reddit-fueled meme stock movement that is still actively in the markets today.
Consider this to get a sense on the power of this new crop of investors.
GameStop’s stock (GME) opened at $ 5.80 on January 6, 2020, reflecting years of slowing sales growth and management exodus. The stock hit a record high of $ 483 on January 25, 2001. Today, GameStop’s stock trades around $ 100.
2. Runaway inflation
With economies and businesses shutting down during the pandemic, supply chains essentially stopped working. That led to merchandise being stuck on ships and empty shelves at retailers. Semiconductors were in short supply.
Once supply chain bottlenecks began to ease a bit, prices for shipping shot through the roof as businesses want to unload their goods.
In turn, those higher costs were passed onto consumers at a breakneck pace.
Consumer prices surged 7% in 2021, the largest 12-month gain since June 1982.
No let-up in this red-hot inflationary backdrop is forming as supply chains continue to struggle with the pandemic and the Russian War against Ukraine has triggered sanctions from the West.
February’s Consumer Price Index (CPI) skyrocketed 7.9% from a year ago. Economists tell Yahoo Finance Live the CPI could hit double-digit gains in the months ahead as gas prices have soared due to the overseas war.
3. Home-buying boom
The pandemic has triggered a complete rethink on the part of people as it pertains to work-life balance. One’s home is now truly considered their castle, with an office conference room. People fled cramped major cities, had pandemic babies and opted for larger, more affordable homes out in suburbia.
A total of 13.2 million new and existing homes were sold in America in 2021. For those not buying a new place to live, the pandemic unleashed a wave of remodeling to one’s existing dwellings.
Home improvement retailers Home Depot (HD) and Lowe’s (LOW) have been big beneficiaries – shares are up 111% and 40%, respectively the past two years.
Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.
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