Winter 2021 Investment Report

It’s hard not to be optimistic about 2021 after a chaotic 2020 – which saw US employment decline by almost 10 million jobs, a tumultuous election cycle and over 400,000 lives lost to COVID-19 in the US. We expect a strong recovery in the economy in 2021 as the majority of adults are vaccinated this year and look forward to resuming client meetings across a table versus in front of a screen!

We are not alone in our optimism.
Even as COVID-19 cases ramped up in Q4, markets focused on the positive vaccine news, more stimulus from governments and a conclusion to the US presidential election. US large cap stocks, which had led equity markets (due to a heavy tech focus), rallied another 12% in Q4 2020. However, virtually all equity asset classes saw strong returns in 2020, with US small cap stocks up 30%+ and emerging markets up 20%. Equity analysts have continued to increase their expectations and now project S&P 500 companies will see sales grow by 9% in 2021 and earnings grow by 23%.

Continue reading for insight into how the Biden Administration will impact stocks and a look at whether or not we are in a bubble.