The Outlook For 2021By: Julian Morrison, Investment Analyst Posted:
The year 2021 is expected to be the start of an economic recovery, on the back of immense change triggered by COVID-19.
Investors have a chance to prepare for 2021 by going back to the drawing board, assessing their time horizon, risk appetite, build financial ammunition and strategically position for the next set of opportunities. This is primarily because we are in the middle of a paradigm shift, underscored by a surge in digitization and new ways to deliver products and services.
COVID-19 has forced many companies to pivot and get stronger, while new firms are being launched as we speak. This presents unique investment opportunities, which can be identified through research and the guidance of qualified investment professionals.
What investors need to do now is take the time to reassess their investment objectives and risk profiles to ensure they are in line with the new environment. Investing during an economic boom versus a recession can drastically alter the risks of an instrument, as the economic climate affects investments asymmetrically. Likewise, our own financial situation is sensitive to these changes which can affect one’s ability and willingness to take risks.
Other key considerations include criteria such as growth versus value stocks; dividend and interest income versus capital appreciation; and other key characteristics which play a part in creating a personalized portfolio.
In our view, the outlook for 2021 is one that is cautiously optimistic not only because of the massive fiscal and monetary support provided by governments globally, but the ability and agility of companies to adapt and pivot to the changing business environment.
We are guided by the International Monetary Fund’s (IMF) expectations of a recovery of the global economy in 2023. Therefore, the journey ahead is not a sprint, but a marathon.
2020 is almost done and we are ready and only looking forward to the new opportunities that 2021 brings.