For all the crazy twists and turns 2020 delivered, the year is\nfinally coming to a close. For investors, that means it\u2019s time to start\nthinking about possible investment themes for 2021. Here are three to consider:<\/p>\n\n\n\n
1. The Return of Inflation<\/strong><\/p>\n\n\n\n The pandemic\u2019s sudden onset drove prices lower early in the\nyear, as businesses shuttered and new orders ground to a halt. Businesses\n(outside of those providing essential goods) hesitated to rebuild inventories, and\nsupply chains fell into disarray. This sequence of events has cratered\nyear-over-year inflation readings, meaning that we\u2019re entering 2021 with very\nlow comparisons. In our view, this potentially means much higher year-over-year\ninflation readings by summer 2021 than what we\u2019ve been used to seeing. <\/p>\n\n\n\n What\u2019s more, the coming year will almost certainly deliver\nwaning economic risks associated with the pandemic\u2019s spread. By some estimates,\na majority of Americans who want the vaccine will have had access to it by the summer.\nThat means the approximately $1.3 trillion in household savings \u2013 which may\nincrease with a new round of stimulus checks and unemployment benefits \u2013 could\npotentially result in a spending spree to coincide with the return of \u201canimal\nspirits\u201d and physical engagement with the economy. From a supply-demand\nstandpoint, excess demand may end up far outstripping available supply, putting\nupward pressure on prices.1<\/sup><\/p>\n\n\n\n ______________________________________________________________________________________________<\/sup><\/p>\n\n\n\n Improve Your Long-Term Investment Goals with This Simple Step!<\/a><\/strong> ______________________________________________________________________________________________<\/sup><\/p>\n\n\n\n One interesting feature of rising inflation in 2021, in our view, may be that nominal bond yields do not go up materially (as they normally would with rising inflation). Higher inflation historically has been a net negative for investors, as it generally led to higher interest rates and therefore compressed valuations for stocks (given the higher discount rate). But in 2021, we already know that the Fed is ready to see inflation tick higher, and that higher inflation will not necessarily trigger raising rates or changing their bond purchase regimen. <\/p>\n\n\n\n 2. Accelerating Economic Trends Help Big Tech, But Regulatory Efforts Hurt<\/strong><\/p>\n\n\n\n In Q4 2020, Google was dealt not one, not two, but three <\/em>major lawsuits from the Department\nof Justice, Attorneys General from 11 states, and Attorneys General from 38\nstates, respectively. Meanwhile, Facebook faces an antitrust lawsuit on par\nwith the Microsoft suit in the late 1990\u2019s, where the Department of Justice is\nattempting to break up the company. Needless to say, the headwinds against Big\nTech are growing stiffer, and the efforts remarkably are also bipartisan.<\/p>\n\n\n\n This comes in a year when technology companies enjoyed among the highest revenue, sales, and free cash flow growth (in aggregate), coupled with very strong equity market performance. It also came in a year when the transformation to the \u201cdigital economy\u201d went into overdrive, with businesses across every sector accelerating efforts to build digital infrastructure and to reach customers online. What lies ahead for technology companies will be a key story in 2021, but investors might reasonably expect that regulatory efforts will increasingly start to make earnings growth of years past more difficult to attain.<\/p>\n\n\n\n 3. Keep Thinking Globally<\/strong><\/p>\n\n\n\n The United States is poised for breakout economic growth in\nthe second half of 2021, in our view, but many other countries are already\nthere. Australia, South Korea, New Zealand, and China have all but squashed out\nthe Covid-19 pandemic, and their respective economies are firmly on the path\nback to sustained recovery. <\/p>\n\n\n\n With China in particular, the rivalry with the United States\nappears here to stay. Nowhere will the competition become fiercer than in the\nrealm of technology, as both countries seek self-sufficiency in critical\nindustries of the future, like Artificial Intelligence, semiconductors, and 5G.\nInvestors would be wise to look both ways when it comes to investing in growth\ntrends, as the two economic superpowers chart their own courses. <\/p>\n\n\n\n In Europe, the European Central Bank has committed to more\nstimulus, and the bloc\u2019s recovery is said to focus more on green infrastructure\nand digitization spending. In terms of going where the liquidity is, Europe\nwill certainly be a place to look, in our view.<\/p>\n\n\n\n The Importance in Knowing Your Net Worth<\/strong> \u2013 The market was constantly changing and impacted in 2020 due to various events. While we may not know how the market will be affected long-term, knowing your net worth can be critical to your financial well-being and can help you prepare for what\u2019s ahead.<\/p>\n\n\n\n Calculating your net worth may give you a better idea of\nwhere you stand in terms of your long-term investment goals. If you do not\ncurrently know your net worth, then now may be a great time to calculate it.<\/p>\n\n\n\n If you have $500,000 or more to invest and want to\nunderstand how to measure your net worth, download our guide Measuring Your Net\nWorth.3 <\/sup>Simply click on the link below to get your copy today!<\/p>\n","protected":false},"excerpt":{"rendered":" 2021 themes include rising inflation, tech growth (but regulatory issues), and an increasingly global perspective<\/p>\n","protected":false},"author":3,"featured_media":7426,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[71,73],"tags":[],"class_list":["post-9177","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-private-client-group","category-steady-investors-week"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9177","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=9177"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9177\/revisions"}],"predecessor-version":[{"id":10485,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/9177\/revisions\/10485"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=9177"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=9177"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=9177"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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Consumers are responding in many different ways to this current pandemic. It\u2019s impossible to predict exactly how the future will pan out or how the market could be affected in 2021, but you can try to prepare for what\u2019s to come. Knowing your net worth is a great place to start as it is critical to your financial well-being and can help you prepare for what\u2019s ahead in the future.
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If you have $500,000 or more to invest and want to understand how to measure your net worth, download our guide Measuring Your Net Worth.2<\/sup>\u00a0Simply click on the link below to get your copy today!
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Download Zacks Guide, Measuring Your Net Worth<\/a>2<\/sup><\/strong><\/p>\n\n\n\n