Looking Ahead to 2021 - December 16, 2020
Assuming we don’t see a steep pullback in stocks over the last two weeks of December, the major averages will finish higher for the year.
Let’s look ahead. What might influence shares next year?
- The economy is expanding.
- An expanding economy would likely fuel higher corporate profits.
- The Fed has pledged to hold short-term interest rates low.
- Substantial amounts of liquidity remain in the financial system.
- Distribution of the vaccines promises to slow the virus next year and remove hurdles to economic activity.
- Vaccine distributions problems could surface.
- Congress may deadlock on new fiscal stimulus.
- Is there too much complacency that long-term interest rates will remain low?
- Economic uncertainty is high.
The unusual amount of economic ambiguity this year didn’t prevent a massive stock market rally off the March low.
It’s one more example that timing markets based on imperfect economic information can lead one astray.
Well-diversified financial plans tailored to your specific needs have historically provided the most effective path to one’s financial goals.
If you are adhering to a well-diversified holistic plan, you are to be congratulated. You have chosen the less traveled road.