A 20-year-old investment advisor shares why he’s soaring in the industries most affected by COVID. He explains how he invests in crypto while avoiding tokens that “will eventually end at zero.” According to him, “Weaker players will be the strength of the 2022 market.”
Warning for altcoin
Kevin Philip believes industries weakened by COVID are poised to reap big gains this year. He also says that Web3 applications will be a major economic driver, allowing the technology to dominate. Philip shared how he plans to use “classic” investment methods to acquire crypto risk. In the first hits of COVID-19, recreation, travel, entertainment and hospitality were among the sectors suffering the greatest economic losses. While the lasting extent of the damage is not yet fully understood, global consulting firm McKinsey estimates that it may take more than five years for these hardest-hit sectors to return to 2019 GDP contribution levels.
With the pandemic still raging globally, it may seem a little unreasonable to even consider investing in these sectors weakened by COVID. But that’s exactly what financial advisor Kevin Philip recommends investors do in 2022. “Next year’s market strength will be weaker players,” said Philip, a partner at Los Angeles-based Bel Air Investment Advisors, which manages $8 billion in assets for high-net-worth clients, including Hollywood celebrities. The main driving force behind Philip’s view is that as the world “goes back to normal” this year, COVID will start to take a back seat.
While the three biggest issues in the markets today are COVID-19, the Federal Reserve and inflation, Philip ultimately believes these factors will not hinder US growth. On the contrary, he believes that the main theme in 2022 will be the continued growth and resilience of the US economy. First, Philip is optimistic that inflation will begin to stabilize as consumers begin to reduce their savings by spending more and taking on more debt. While the supply chain bottlenecks that are worsening the macroeconomy have not been fully resolved, “stress will likely decrease significantly in the next six months,” he said.
COVID ‘losers’ hold the key
According to Philip, the end of 2022 will mean “the end of COVID that drives our daily lives.” “What this means for me in the market is a return to normal in a way that stocks not benefiting from the COVID period will catch up,” the analyst explained. COVID urged “losers” to “become new winners”. “As we come out of the COVID era, you will see a continued appetite for travel and leisure,” Philip said, describing the hospitality industry as one that will benefit from the waning pandemic pressures. He is also optimistic about energy stocks as workers start going back to their offices. Philip also likes the banking industry, which he says has been hurt in recent months by emergency alerts and central bank measures that have flattened the interest rate curve.
The analyst believes banks will become stronger as the Fed tightens monetary policy and raises interest rates, which will provide them with a “more profitable world”. Finally, he predicts that the tech sector will continue to dominate, with the pandemic relying on work-from-home measures to “push forward” innovations and developments by up to a decade. In particular, Philip says Web3 “will be an even greater economic driver in the years to come.” Philip believes that growth stocks will outperform value stocks in the long run. However, he points out that there will be “less voluminous” growths than before. It also advises greater exposure to large-cap companies, warning investors to be wary of small and medium-cap (SMID) stocks in light of upcoming rate hikes. “SMIDs are more sensitive to rising interest rates because they have to borrow money to grow,” Philip explained. Philip added that returning to high-value stocks in the US is a “huge win” for him in 2021.
Applying ‘classic’ investing in cryptos
Despite Philip’s rise in technology in general and Web3 in particular, he is still cautious about investing in cryptocurrencies. His skepticism believes that owning crypto only makes sense if a token is “an anchor of a truly successful trading environment.” Philip said that the popular altcoin Ethereum is an example of a successful altcoin that has become a standard in the market. Despite his prudence, Philip has claimed his intention to enter the crypto market, albeit it will “expose you with more classical investment methods.” “I think we’re going to participate in this through publicly traded, well-known companies that already exist and are profitable, the likes of which could be a Meta, Google or Nike,” he said, pointing to Nike’s recent big strides. Philip, stock