The stock market has been in good form following on from a chaotic 2020 where the market fell during the height of the Covid-19 pandemic before recovering in spectacular fashion over the 12 months that followed. 

During this time, sectors like IT, healthcare and pharmaceuticals outperformed many other stocks while other industries like transport and hospitality largely underperformed. 

While 2021 has shown that we’re not out of the woods yet in terms of restrictions, there are plenty of emerging opportunities for new investments that carry strong levels of potential as we continue to transition into the era of the ‘new normal.’

With virtually every industry set to be directly impacted in someway or other by Covid-19 for years to come, let’s take a look at four of the more positive and high-potential investment opportunities available today:

1. ESG Stocks

Environmental, social and governance (ESG) assets refer to investments that seek both financial return whilst helping to bring about positive social and/or environmental change. This form of investing supports sustainable, responsible, and impactful investing. 

This form of investing has been growing exponentially even before the emergence of the pandemic. Between 2005 and 2018, there’s been a 6,417% increase in ESG investing and the trend is anticipated to continue throughout 2021 and beyond. 

(Image: Deloitte)

According to Deloitte data, ESG-mandated assets may make up half of all managed assets in the US by 2025 - illustrating the sector’s potential for significant and sustained growth.

Significantly, these figures suggest that the popularity of ESG stocks will continue to leverage growth over time. Making the holding of these more sustainable assets a safe option as markets continue their recovery in the wake of the pandemic.

2. Cyber Security

Covid-19 has catapulted many individuals and businesses towards digital transformation. As technology continues to develop, our cyber security needs will have to keep up. 

It’s logical to see cyber security technology continue to develop and change to suit new needs - including the necessity of utilising AI, machine learning and big data solutions in the prevention of more sophisticated attacks. 

As more employees become accustomed to working from home during the pandemic, there’s also reason to expect a greater need for remote security or home-based services to help keep business information safe from prying eyes online. 

In financial terms, there’s plenty of forecasted growth surrounding the industry, and the cyber security market is expected to grow from $165.78 billion in 2021 to $366.10 billion by 2028. 

We can already see evidence of investor interest in cyber security companies following on from the successful IPO of DarkTrace on the London Stock Exchange. This growth in industry demand may make cyber security a good bet for more exponential growth over the coming years.

3. Consumer Discretionary Stocks

Consumer discretionary stocks typically involve companies that offer products and services that are designed predominantly for luxury or pleasure. 

Also known as consumer cyclical stocks, they are seen as cyclical because demand for these products or services tend to be higher during growth phases of the business cycle. 

Consumers typically demand these products and services more when they have more money and feel optimistic about their employment and savings. When economies shrink, the demand for these stocks tends to correlate downwards also. 

As the height of the pandemic passes and the distribution of vaccines brings more consumer confidence in 2021, consumer discretionary stocks such as Apple (AAPL), Netflix (NFLX), and Disney (DIS) may emerge as a solid investment decision.

4. Construction

As we emerge from the pandemic and the world looks to recover from a severely challenging start to the decade, governments around the world have commissioned massive economic stimulus packages designed to act as a shot in the arm to industry. This stimulus may help construction and construction equipment industries - particularly among US firms. 

Although it’s not the clearest choice in terms of sustainability among this list, construction may well become one of the best performing sectors during the recovery from the pandemic because it may see several years of growth if economic stimulus plans yield the returns some economists have projected. 

Notably, United Rentals (URI) could be a strong way of profiting from this market growth. The company rents out construction and industrial equipment to a host of clients - and may be set to see significant demand over the coming years. 

Due to the costs associated with acquiring construction equipment, many firms opt to rent - with United Rentals acting as one of the largest operators in this industry across the US. 

As we continue to emerge from the pandemic and towards the era of the new normal, it’s likely that we’ll see a wide range of unconventional investment opportunities emerging. While some industries will accelerate away from 2020’s hardships, others may require some consolidation along the way. 

However, with the distribution of Covid-19 vaccines increasing, it may be a great time to invest in high-potential stocks emerging from the health crisis. Optimism surrounding investors may increase along the way, making this an excellent opportunity for some sound investments.