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The stocks you should have bought at the beginning of 2020

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Written by: Emma Lunn
08/12/2020
Zoom, Slack and Amazon were among the pandemic stock market winners, according to financial trading platform Stake.

The platform analysed the effect the pandemic has had on the stock market, to discover the winning and losing businesses of 2020.

The analysis revealed the five stocks trading on the US stock market that have performed the best throughout the year, yielding the highest return on investment (ROI). It also looked at the stocks that have been most sensitive to the changing events as the year progressed.

Pandemic winners

Perhaps unsurprisingly, virtual meeting platform Zoom has done well this year. At the start of the year Zoom shares were about $61.20, and rose to $106 when the pandemic started in March. They are now sitting at $362. This equates to a 491% growth throughout the year.

Remote working platform Slack has also had a good year. Slack started the year at $23.02, dropped to $17.04 when the pandemic broke out, and then increased to a steady $29.93 (a 76% rise) since the start of the pandemic. Its recent acquisition by SalesForce has pushed the price even higher to $43.84 – an increase of 90% since the start of the year.

Amazon is the most valuable share to make the top five. It began the year at $1,898 before dropping to $1,689 when the pandemic initially broke out. Since then it has risen to $3,098, an increase of 63% since pre-pandemic levels.

Netflix also took an initial dip during the pandemic from $329 down to $298.84. However, since becoming one of the main forms of entertainment this year, it has risen by 45% to $476.62.

Exercise equipment company Peloton, which streams live workouts to people’s homes, was also a pandemic winners as people turned to new forms of exercise while confined to their homes. Its share price rose by 112% this year from $29.74 to $112.05.

According to Stake, if investors had invested $1,000 split equally into these five stocks at the beginning of the year, they would now have a portfolio worth $2,900.

Pandemic losers

While stocks for companies specialising in remote and virtual arenas proved to be pandemic-proof, it was a different story for stocks in companies that could not function remotely such as the travel and resort industry.

However, despite the big hit that a lot of these companies took this year, Stake highlighted that even some of the most coronavirus sensitive stocks have rallied from their March lows.

For example, Royal Caribbean Cruises initially saw a 78% drop from $134.65 to $29.94 at the start of the pandemic, but has since recovered 153% since March to reach $75.78.

The Quantum AI app platform also pointed out that the US stock market as a whole has recovered swifter than the UK.

The benchmark of the UK’s FTSE 100 was $7,604 at the start of the year, which dropped to $5,151 in March. It is currently recovering and is at $6,410.69, which is a 24% rise since March and a net drop of -16% since January.

Matthew Leibowitz, CEO of Stake, said: “You only have to look at the markets to see what a strange and inconsistent year 2020 has been across the globe. It has been reassuring however that even with an ongoing global pandemic and a presidential election like no other that the markets have managed to not only survive but bounce back, and in some cases bounce back stronger than ever.”

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