In the era of meme investing, NFTs and #WallStreetBets, it can be tempting for investors to hop on the "get-rich-quick" bandwagon. This, coupled with a resurgence of cyclical stocks in early 2021, lured many investors to take their profits made from growth stocks that dominated markets for most of 2020, to purchase beaten-down cyclical stocks, pushing the latter towards pre-pandemic levels.

Investors who want to generate the most alpha over the long term, however, should resist the temptation to change course based on these short-term trends.

We’re not going back to the same world we lived in pre-Covid. Things will normalize, yes. But there will be key differences in how we live, work and operate as a society given how massively behaviors changed during the pandemic. We’ve learned to be more efficient through technology and that is unlikely to change. In fact, technology is now woven through every industry and is being adopted at breakneck speeds.

Cyclicals that are unable to generate earnings growth will sunset as the world normalizes, and fundamentals will continue to lead stock returns. Companies with the most compelling fundamentals and strongest structural tailwinds will be better positioned to prosper. Avoid the distraction of the latest fad and instead focus on industries and companies with high growth potential given their transformative impact on our daily lives. There are four areas that we are particularly interested in.

First, the most important driving force for consumers in the global economy is coming from the shift to direct-to-consumer (DTC) business models. DTC companies can include e-commerce, global brands with omnichannel distribution, video streaming and online dating. While e-commerce penetration rates currently sit around 18% globally after accelerating meaningfully in 2020 due to the pandemic, there is still extraordinary growth potential especially in places like Latin America. Online dating is another area we find interesting as we see it as largely structurally immune from Big Tech competition and well positioned in a post-Covid world.

Second, the fintech revolution rooted in digital payments. It’s not news that with the explosion in e-commerce activity, digital payment platforms that facilitate e-commerce sales are seeing surging demand. But the opportunity for these platforms extends far beyond just e-commerce, especially in emerging markets. In these vital growth markets fintech platforms are replacing the limited traditional banking in these regions. For instance, digital payment platforms are enabling offline bill payments, asset management and small loans—extremely valuable services that are scaling quickly and creating exciting investment opportunities.

Third, there are tectonic shifts underway in enterprise technologies. Cloud-based applications and services are set to be the biggest transformation for enterprises since the advent of the internet. Just as the power and the reach of the internet was severely underestimated, so too is the business-changing potential of cloud businesses. According to Statista estimates and the Synergy Research Group, SaaS applications have grown at approximately 40% annualized since 2009 and that’s unlikely to slow down anytime soon, since having a digital infrastructure has become critical for businesses across all industries. Profit margin expansion among companies is evolving to asset-light balance sheets in nearly every sector of the global economy.

Finally, we have arrived at the electric vehicle (EV) frontier. The transportation industry is on the brink of a new era as EVs are poised to turn century-old internal combustion engine vehicles into relics in the coming decade. Where consumers traditionally needed to purchase new vehicles to get the latest technologies, EVs are now being built with components that can be turned on through software subscriptions to enable features like autopilot. This will help reduce the upfront cost of the vehicle while creating recurring revenue streams. As the industry grows, so too will demand for electric batteries, smarter semiconductor chips and mobility services, providing investors will multiple ways to invest in the EV theme.

Of course, it’s smart for investors to be positioned for the release of huge pent-up demand; as economies reopen, there will be soaring demand for things like travel, tourism and restaurant dining. But it’s equally—if not more—important to continue to seek out open-ended growth. While cyclical stocks may have their day in the sun, there are much more compelling opportunities in secular areas of the market that will have sunny skies for years to come.

Mark Baribeau is head of global equity at Jennison Associates.