Setting Expectations for 2021

The question we are posing is as follows: Is it possible that the announcement of the FDA-approved vaccines and the talk of additional financial stimulus helped claw some of 2021’s potential gains back into 2020? When you factor in the slow launch of the vaccines, it is worth a thought. Having said all of that, we are still optimistic for a prosperous year in the equities markets in 2021.

What is the current environment seems like a good first step. The quick approval of two new vaccines by the Food and Drug Administration (FDA) has been encouraging and additional vaccines are coming online soon as well. However, the federal government’s “Operation Warp Speed” initiative called for 20 million vaccinations to be performed in the U.S. by the end of 2020, but it came in at a little more than three million, according to Axios. On 1/2/21, the U.S. recorded its highest number of coronavirus cases ever for a single day (277,000), according to Medical Xpress. With infections surging, top U.S. government scientist Anthony Fauci warned that the worst may be yet to come. These latest statistics suggest that clearing the COVID-19 hurdle may extend a bit further into 2021 than originally thought. These two vaccines, and any others that may gain approval, are likely the best chance we have for fully reopening the U.S. economy. Until we receive some guidance on when that day will come, perhaps the biggest challenge for most equity investors could be whether to reposition some of their capital to potentially exploit a post COVID-19 world or stay the course, in our opinion.

The US Markets and International and Emerging Markets all offer interesting opportunities to consider. In the US the question is – can Value Stocks close the gap to Growth stocks. Utilities, Energy and Finance were negative for the year while Technology soared beyond plus 40%. Taking profits and paying taxes is not an easy decision and having a plan for why and when you would do so is a highly valuable process.