Dividends and Investors look beyond lockdown in bet bricks and mortar retailers will rebound in 2021

The year has started and we know some things, but we do not know other things. We know a vaccine is available and people are beginning to receive it, although the numbers are a far cry from 50%. If they are over 50%, there is high probability the affects of COVID will decrease rapidly. If and when that happens and if COVID mutations do not affect the general population, tourism and hospitality will open up and increase. As people are able to move around freely, one of the big drivers of the economy is for consumers to shop. Where do they shop? How do they shop? do they go to malls again? Do you feel comfortable going to a mall?

In an article by April Joyner of Reuters, equity investors are asking themselves should I invest in retail stocks? The SPDR S&P Retail ETF which tracks a broad group of retailers is up 40% in 2020, what will it do in 2021?

Congress recently passed a stimulus bill which puts about a trillion dollars in the economy, some of it goes directly to consumers or taxpayers, what will the do with it?

Eric Marshall, portfolio manager of Hodges Capital Management noted JC Penny, J Crew Group, Pier 1 Imports and Neiman Marcus have declared Chapter 11 bankruptcy. This allows the companies to restructure their operations, close stores and keep the best ones open.

On-line shopping has increased, by researching the stores on-line sales and expectations, you have an idea of what to expect in the future. One method is to determine if on-line shopping for you was easy at their sites. What is your expectation for shopping in September?

Alex Ely, chief investment officer of Macquarie Investment Management said the fundamentals are going to be better in the second half of 2021 or 2022, you need to buy 6 to 9 months ahead of time.

Linking to dividend paying stocks, prior to COVID having retailers in your portfolio was a very good thing for there was consistency in the sales and some companies usually did very well. Since COVID retailing has changed, will it go back or are hybirds here to stay. When you examine your shopping habits and then people around you, there will be an indication of what shops to look and which ones to avoid. It will take 2 years before retail stores are consistent again, which means it is better to seek alternatives first before jumping into the retail sector.

There are more questions than answers, till the next time – to raising questions.

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