Here are my thoughts on the 2021 stock market, where I'm investing my money, and what I think is going to happen - Enjoy! Add me on Instagram: GPStephan
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The Bad News that would affect the stock market:
It’s speculated that, once our economy begins re-opening, there won’t be enough consumer demand to justify companies holding on to everyone…so, they’ll inevitably be forced to reduce their overhead to maintain profits.
2. We also have the possibility for further shut downs.
3. As we’ve heard time and time again…the stock market is not the economy, and it’s becoming increasingly disconnected from the day to day reality.
4. And fourth…there’s the concern that people won’t spend as much money as they once did…leading to lower corporate profits.
GOOD NEWS for the stock market:
1. We got some talks about a pretty substantial vaccine that COULD be coming soon, if everything goes according to plan…and once that happens, our economy could very well return to kind -of normal.
2. There’s the notion that IF the economy gets too bad…the Federal Reserve and government will step in to boost it up.
3. Because we’ve already had time to process a lot of the information…I doubt that, if we DO have a drop…it’s going to be as sudden and severe as what we saw back in March.
4. There’s already a LOT of “bad news” priced into the markets.
5. Fifth, as our economy EVENTUALLY re-opens…we could see a big resurgence towards “Recovery Stocks.”
I have a feeling we will continue on a similar trajectory, but on a smaller scale. I don’t think we’re going to have the same levels of worry and euphoria as we’ve seen this year…and maybe that’s a good thing…but I think 2021 is going to bring us a LOT more stability now that a lot of the unforeseen surprises are out of the way.
My own investment strategy next year is to continue to plow most of my money back into index funds and just let them grow. If the market is down, great - I buy cheaper - if the market is up - great - I’m making money…so, either way, it’s a win. I’ll be buying a LOT of the SP500…I’ll be picking up the occasional individual stock if something comes my way or looks interesting…but, the bulk of what I do is just a boring SP500 index fund, unless a good real estate deal comes along…but, I haven’t seen anything lately…so, more index funds it is.
I’d also be fairly optimistic on renewable green energies and bio tech…I know those have seen a CRAZY run…but, I think as we continue to shift to green markets, electric vehicles, and more sustainability…I think those should continue to do really well. Even California wants to go fully electric by 2035…and that could be a huge push in that direction.
But, honestly…I’m a fairly boring investor…I just believe it’s all about doing the same things over and over again, repetitively…regardless of what happens in the short term…but, this upcoming year…I THINK we’ll see more green than red…and more ups than downs. Basically, I’m thinking we’re likely to see another positive year.
For business or one-on-one real estate investing/real estate agent consulting inquiries, you can reach me at GrahamStephanBusiness@gmail.com
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