The New Year brings exciting things and provides a chance for us to revisit our priorities and redefine or realign our goals. I think we are all curious as to what this year will hold especially given what we faced last year. I believe most of us are hoping that this year will allow us to reconnect with our families and begin getting back to living our life, vacationing, enjoying concerts, parties with friends and family, and many of the other things we may have taken for granted.
Recently, I have had quite a few clients reaching out to me questioning the markets, is there going to be a significant downturn, and what I think the future will hold? Well despite what you might think I do not have a crystal ball on my desk (I know hard to believe), BUT I do have resources available to me and I wanted to share with you some of the thoughts and opinions of leading experts.
Looking forward to 2021 and Positive Developments…
In a recent article by Federated Hermes they stated that positive recent developments should allow us investors to be, “cautiously optimistic!” The reasoning behind this is not only the rollout of the vaccines, but the Federal Reserve’s outlook on GDP is projecting a growth of 4.2% in 2021. They also anticipate that unemployment will continue to decline as more workers return to their jobs. In addition, the recent stimulus package has pumped money into the economy, which may allow people to begin taking additional cash to the equity markets. (The New Year Revives Old Optimism, www.federatedinvestors.com).
According to Loomis Sayles, the Federal Reserve Chair Jerome Powell and other members of the Federal Reserve board are stating that they expect policy rates to remain at or near zero for a period of years. These monetary policies may help to foster economic growth and broad labor market improvement. They do anticipate that the US dollar will continue to weaken, however this may help to foster health in the global economy. (Investment Outlook, January 2021. https://info.loomissayles.com/investment-outlook-january-2021?&dref=loomissayles).
Look to Opportunities in International Markets…
Hartford Funds recently stated that we need to look beyond our US borders to the International Equity markets. US stocks have dominated the conversation the last decade but there are several reasons to look to the international markets. As I just stated there is a belief and anticipation that the US Dollar will likely depreciate in the coming years. This leads to an atmosphere for international equities to outperform domestic equities, therefore we investors need to look not only to international equities but also emerging markets for investment opportunities. (https://www.hartfordfunds.com/market-perspectives/looking-beyond-the-borders.html. Looking Beyond the Borders: Opportunities in International Equities).
I hope this provides you optimism and hopes for a great 2021! As always, if you have specific questions about your portfolio please do not hesitate to contact me. I cannot predict the future but keep in mind that through our work together we have designed an investment portfolio that is build in anticipation of market fluctuations, diversified to allow us to capitalize on investment opportunities as they become available, and as always aligned with your individual investment goals and risk tolerance.
~ Happy Reading