As the vaccination rollout continues to accelerate and states begin loosening COVID-19 restrictions, our investment thesis of economic growth over the next two years still remains intact. The government has also been quick to react with economic stimulus, which is positive.
We may not have a declared winner to the 2020 Presidential contest of November 4th, we have the needed information to begin positioning our portfolios for the future. Now, it seems Congress will stay divided, with Republicans retaining control of the Senate.
As the economy continues to recover from the pandemic, driven by inoculations and expectations of a return to normalcy, inflation expectations have risen. This is confirmed by several underlying data points indicating risks to the upside.
This year has been a wild ride, it started with all-time high levels seen in the stock market early in the year. This was then followed by a market correction due to COVID-19 with a quick recovery and new market highs all before the end of summer.
2021 Investment Strategy & Outlook
We believe the big picture for 2021 will be a broad-based re-opening of the economy. As businesses begin to get back to normal, we anticipate above-average economic growth for the next one to two years. Our 2021 outlook walks through six key factors.
2021 Investment Outlook and Strategy
The stock and the bond markets have recovered much of the losses experienced this year. Stocks are close to all-time highs and bonds are all-time low-interest rates. This period of time may lend itself favorably to stock performance as compared to bonds over the next years.