Gabriela is the Founder of the Latino Wall Street movement, which provides financial education to the Latino community.
One important lesson the Covid-19 pandemic has taught these past two years is that wellness is not a luxury — it’s a necessity. When I talk about wellness, I’m not just talking about healthcare, but also about building a healthy life on a physical, mental and spiritual level.
Thus, paradoxically, I believe it’s fair to say wellness is one of the great post-pandemic “winners.” By this, I mean how the concept of well-being has become a priority for so many people. Something that five or 10 years ago was considered a luxury has become a necessity today.
I reached this conclusion during my pregnancy when I began to frequent a renowned San Juan-based maternity center, which is basically a spa highly specialized in the care and well-being of mothers during pregnancy. The result of these visits to the maternity spa, in addition to helping me feel fantastic and turning my pregnancy into an unforgettable experience, has been to realize the impressive growth that the wellness industry has experienced since the pandemic started in March 2020.
According to a December report from the Global Wellness Institute (GWI), the wellness industry is forecast to grow at an average rate of 9.9% per year, despite intermittent trade restrictions since the beginning of the pandemic, which makes it a tempting sector for companies and investors. You can see the industry’s influence everywhere with the bombardment of marketing about the importance of leading a healthy life, new luxury spas, more food supplements, traditional brands creating gluten-free lines, the ease of access to preventive medicine plans, etc.
The report adds that with this growth rate, the industry could reach almost $7 trillion globally by 2025. However, I do not consider it unreasonable to think it could experience even faster growth in the near future. These are the three main reasons the wellness industry presents investment opportunity for years to come.
• The pandemic highlighted the importance of one’s health. The waves of mortality in 2020 and 2021 showed that the risk of death from pandemic diseases is real. The pandemic also emphasized the importance of healthy lifestyle habits such as eating better, going to the gym, practicing yoga, managing weight and lowering stress levels. This point is key to predicting the growth of various sectors within the industry. In fact, the healthy eating, nutrition and weight loss sector is the second largest in the industry and accounts for about 22% of revenue.
• We’re seeing greater institutional responsibility. It’s said that “crises unite souls,” and without a doubt, this saying can be applied to the post-Covid-19 reality we are living. After experiencing the economic and operational risk posed by the pandemic, more companies are expanding well-being benefits for their employees. This is a point we take very seriously at Latino Wall Street, where we have put in place policies and benefits to encourage healthier living for our team members.
• Mental well-being is part of the equation. Lockdown measures implemented within the U.S. and many countries around the world have resulted in sharp increases in rates of anxiety and depression.
In fact, the mental well-being sector was one of the big “winners” during the pandemic, as people sought measures to counteract the negative impacts that lockdowns and pandemic stress had on their mental health. Within this sector, the growth of the meditation and mindfulness segment (25% from 2019-2020) stands out.
These are the kinds of factors I teach my students to analyze when making investments that hopefully help them grow their capital steadily without living with their hearts in their mouths with each transitory price drop.
Another element of practical analysis I always instill in my students to determine if a company or sector is a good long-term investment is to analyze the impact the company has on their lives and how much they use it on a daily basis. In fact, the wellness industry is a great example: Are you willing to invest money in looking and feeling better? Do you plan to meditate, do yoga or go to the psychologist on a regular basis? How many people do you know who are interested in their own well-being?
On the other hand, it is also important to consider the red flags that may indicate that a company or industry is not a good investment. To do so, I suggest analyzing geopolitical conditions, trends and possible global crises and speculate which sectors could be affected in the most likely scenarios. The lack of leadership in companies is another negative indicator; a company that changes its CEO several times in a year is certainly not a reliable investment. When you buy shares, you are really becoming a small part owner of the company, and like any other partner, you want to know that the performance of your investment rests in capable hands.
Taking these factors into account can provide clarity to anyone who wants to make long-term investments, especially in an industry that has so much growth potential for the future.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.