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2021 Market Outlook — What to Expect in the Financial Markets This Year

As we look ahead to our 2021 market outlook, it’s impossible not to stop and reflect for a moment on what a journey the past year has been — and not only in the financial markets. COVID-19 has affected us all individually just as much as it has sent the financial markets and economies all over the world on a long and bumpy roller coaster ride that we likely haven’t seen the end of quite yet.
But things are decidedly looking up, with a vaccine now in circulation and a brighter outlook for many economic sectors.
Let’s take a quick look back at 2020 and then set our sights on the stock market forecast for 2021.

Looking back and planning forward

For Genus’ investment team, 2020 meant some big sector rotations as we worked to balance our portfolios in light of dramatic market fluctuations caused by COVID-19.

In other words, we sold a lot of energy and bank stocks and bought a lot of health care, IT and consumer staples in the early days of the pandemic, then we invested in industrials and value stocks later on.

In light of all of the changes, and in our efforts to be transparent with our investors, we launched our Friday Market Insights series to keep everyone informed about the latest market fluctuations. Our final Friday Market Insights video for 2020 offers a nice recap of the year.

“The keyword for 2021 will be hope.”

So what’s in store for 2021? “The key word will be hope,” says Genus CEO and chief investment officer Wayne Wachell. “It’s the beginning of the end of the pandemic with the vaccines arriving, and there’s enough money pumped out to keep the economy going. With a synchronized global recovery, we’re looking at projections of a 5% to 6% growth. It’s a hopeful year in terms of growth.”

In the longer term, Wachell sees interest rates beginning to rise, which would be good for banks, commodities and metals, and would also help energy prices and Canadian markets. “Those are areas that will take advantage of the global synchronized recovery,” Wachell says.

Another area to watch is impact investing. “Companies like Tesla are a de facto hedge against climate change,” says Wachell. “People are going to want to spend more money on companies that are putting these kinds of solutions forward.”

Watch our Market Outlook 2021 Webinar for More Insights

As we look ahead to our 2021 market outlook, it’s impossible not to stop and reflect for a moment on what a journey the past year has been — and not only in the financial markets. COVID-19 has affected us all individually just as much as it has sent the financial markets and economies all over the world on a long and bumpy roller coaster ride that we likely haven’t seen the end of quite yet.

A few of the topics we have covered include:

– Global economic outlooks and trends

– How Canada fares in the post-pandemic recovery – Society’s new normal and what it means for the markets

– Economic sectors and stocks Genus will be favouring in 2021 and why

– Trends in ESG investing

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