James River Capital Believes There is Reason For Continued Optimism
James River Capital knows that 2020 left the world devastated on so many levels. Many people lost their careers, homes, and even their lives. In addition to the raging pandemic, sky-high unemployment rates, business closures, lockdowns, protests, and political unrest left their indelible mark on 2020.
After scrolling through your news feed, it can feel hard to stay optimistic as we go into Q2 of 2021. However, even amid the darkness we still face today, there are plenty of silver linings in 2021.
While it’s unlikely that life will go back to “normal,” we’re seeing glimmers of hope for recovery after a hard year. We won’t return to what we once were, but in many ways, we’ll emerge stronger than ever.
In this article, James River Capital’s co-founder, Paul Saunders, shares insights on how 2021 will bring new beginnings to businesses, the economy, and to people on a personal level.
About James River Capital & Paul Saunders
Along with his business partner, Paul Saunders acquired James River Capital back in 1995. In the 25 years since founding the company, Paul has served as CEO and Chairman of the Richmond, Virginia company.
Today, Paul puts his 30+ years of experience in finance to work for James River Capital’s products. His goal is to balance portfolios using alternative investments, and optimizes these investments for both risk and returns.
3 reasons to keep a positive outlook in 2021
While 2021 has certainly brought its own set of challenges, James River Capital believes that it will go down as a banner year for businesses, the economy, and our personal lives.
1 – Future-proofed business practices
It’s unfortunate, but the pandemic forced businesses to make drastic changes to keep their doors open. If you own a business, you learned firsthand that you must embrace change (often overnight) to survive. Although many businesses sadly didn’t survive 2020, others have shifted their practices to thrive in the “new normal.”
Remote work became the norm for over 50% of the US workforce during the height of the pandemic. As more businesses move to a remote-only model, they’re changing their hiring practices, too.
If your business has a hard time sourcing qualified candidates to fill your positions, James River Capital recommends going remote. Businesses are now free to tap into the global talent market instead of sourcing candidates locally. This is a more competitive method of hiring that makes it easier to find workers without tethering yourself to a location.
Businesses are being more conservative with their budgets, which means marketing spend is low in 2021. That means businesses are more interested in organic marketing methods, like word of mouth marketing. Referrals, reward programs, and even influencer marketing grew during the pandemic. Since word of mouth marketing is the most cost-effective marketing strategy, businesses are seeing great ROI on early investments in WOM.
Businesses also invested more in customer data and personalization to stand out during the pandemic. That’s good news for both brands and shoppers: 36% of consumers want to see more personalized experiences, and data is the first step to mastering personalization at scale.
Technology was a boon for businesses that were mandated to go remote overnight. To accommodate full-time remote work, businesses were forced to offer more flexibility to their employees. That’s why James River Capital invested in employee hardware and a relaxed office schedule during the quarantine.
Plus, many businesses that were previously against remote work are now in favor of it. After seeing remote work in action, many leaders are learning how to manage their teams effectively from anywhere, focusing on results instead of the time employees spend in front of the computer.
2 – Economic growth amid uncertainty
Obviously, the COVID-19 shutdowns led to significant hardships and economic losses. Global economic growth decreased by over 4 percent in 2020.
Amazingly, the economy is starting to recover. In the US alone, the GDP is predicted to rise 4.4% year over year in 2021. Although many businesses closed during 2020, the pandemic forced businesses to innovate quickly. James River Capital believes the pandemic created a silver lining that helped businesses—and economies—recover quickly from the fallout.
Financial priorities have changed
However, that doesn’t mean businesses are continuing with their pre-pandemic practices. Many organizations have changed their financial priorities, taking a more conservative approach with their cash. According to James River Capital, this has led to shifts such as:
- More businesses bulking up their savings accounts.
- Prioritizing stability and cash in the bank instead of investing in new ventures or innovations.
- Increased loan requests, as well as higher loan amounts.
- Vendor consolidation or elimination.
- Careful investments in time-saving or cost-reducing technology.
This means that, while businesses might be more careful with their cash flow, they’re still willing to invest money where they can see a demonstrable return.
3 – Personal improvements
We can’t ignore the significant changes the pandemic made to our personal lives. After the quarantining and homeschooling many of us endured in 2020, we have a few reasons to feel hopeful in 2021.
The vaccine is in circulation
The Pfizer and Moderna vaccines are slowly but surely inoculating the US population against the pandemic. Although there have been issues with the vaccine rollout, the vaccine is becoming available nonetheless.
With a 90% success rate for those vaccines, hope for a more “normal” existence is on the horizon. In fact, vaccine distribution improved stock market performance for many businesses, leading to as much as a 10% increase in stock values.
Global leadership stability
Who could forget the 2020 election? Although America elected its new president, dozens of other countries across the world also elected new leaders last year. With new priorities in sight as a result of the pandemic, we can hope that steady leadership will help us fight the disease together.
More businesses opted for remote working to keep their employees safe during the pandemic. As a result of reduced commutes, there was a noticeable drop in fossil fuel emissions in 2020. We were able to demonstrate the environmental impact of industry and commuting, which many brands are using to justify full-time remote work.
The bottom line
While we would certainly never say the 2020 pandemic was a good thing, it brought a lot of change to our world. Much of this change was harmful and unwanted, but in the face of adversity, we managed to overcome unrest and change for the better.
The resilience we learned in 2020 is transforming into hope for 2021. If you feel listless after checking your news feed, remember how far you’ve come. After all, challenges are opportunities for those who are brave enough to tackle them head-on. Whether it’s at your business, the economy as a whole, or your personal life, there’s plenty to feel positive about in 2021.
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