The fastest growth in decades – but where should you be investing?
Now is the time for investors to top up their portfolios in both value and growth stocks ahead of a stronger than forecast global economic rebound.
As the Dow Jones rallied to a record intraday high on Monday and European markets rallied, with Germany’s DAX reaching a new intraday high, the first half of this year is certainly going to be very different for the markets compared to 2020.
This time last year, fear and uncertainty surrounding the pandemic was rife and we were in the midst of a swift global stock market crash.
Yet, a year on, and thanks to vaccine rollouts around the world, historic stimulus packages and record levels of savings and pent-up demand, a major economic recovery is on the cards.
As I said in a video on my YouTube channel, and in a column for Newsmax, amongst other media, I believe we’ll see a stronger than predicted global economic rebound in 2021, especially in developed economies. Indeed, we could see the fastest growth in decades.
This is shown by the Federal Reserve withdrawing its three lending schemes at the end of this month due to a lack of usage.
Therefore, ahead of this potential economic boom, where should investors be investing?
There is a great deal of chatter surrounding the phenomenon of ‘rotation.’ This is a move into sectors that could benefit from higher inflation and an improving economy, like financial, industrial and energy stocks, and out of technology stocks that boomed during prolonged lockdowns.
Nevertheless, it’s important investors incorporate both value and growth stocks into their portfolios.
After the pandemic, it’s more than likely we’ll retain certain habits such as working from home more, but travel will also resume and we’ll return to public events, yet we’ll be far more aware of the environment and hygiene measures.
In short, value stocks are set for a revival, but does anyone really all of a sudden think that Amazon, Google and Tesla are not companies of the future?
The markets this year are already very different. As such, investors will not want to miss the major economic rebound. They should top-up their portfolios, and make sure they are sufficiently diversified as soon as possible, to sidestep risks and capitalise on opportunities.