First Half 2021 Investment Outlook

Since the beginning of the year, ACE Wealth Partners put forward an optimistic outlook for the markets in 2021. The first half of the year offered a solid upward trend. Covid-19 vaccinations are quickly inoculating an increasing share of the global population and new cases have fallen significantly from January.  Although Covid-19 variants remain a worry for the markets, the economic recovery wound up shorter than expected.  At this point, we believe the United States and developed nations are reaching peak economic growth for the current cycle.  With this brings new fear about inflation, interest rates, and overbought valuations.

The global economy is growing at the quickest pace in decades as consumers and businesses are eager to return to normal. The stock market spent the first half of the year reflecting better-than-expected economic data, but now must wrestle with potentially steady, but slowing growth from an extremely high benchmark.  As demand increased, businesses and the economy have struggled to ramp up supply from the Covid economy – driving prices up.  The main concern is these prices will remain high as inflation sets in. On the other hand, this very well could be transitionary inflation which will slow once supply adjusts from the economy going from 0 to 60.

Even with markets at all-time highs, the outlook for the equity markets are positive through the end of the year. However, Investors should consider risks related to a heating up market and inflation. The prediction of rising markets also includes the assumption that demand for vaccinations will continue, and Covid-19 will be mitigated through the fall.

What does this all mean?   As is always the case with investing, there will be volatility as the world continues on the road to recovery. Although the outlook is positive through the end of the year, a correction will not be surprising followed by a quick rebound. Remember, the stock market drops at least 5% on average three times per year.  It is important to stay invested and diversified based on long-term goals.

Kevin McNab

This article is written by Kevin J. McNab. Kevin is President of ACE Wealth Partners, LLC and is a CFP®, ChFC®, and CRPC®. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. The views expressed in this blog post are as of the date of the posting, and are subject to change based on market and other conditions. This blog contains certain statements that may be deemed forward-looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Please note that nothing in this blog post should be construed as an offer to sell or the solicitation of an offer to purchase an interest in any security or separate account. Nothing is intended to be, and you should not consider anything to be, investment, accounting, tax or legal advice. If you would like investment, accounting, tax or legal advice, you should consult with your own financial advisors, accountants, or attorneys regarding your individual circumstances and needs. No advice may be rendered by ACE Wealth Partners, LLC unless a client service agreement is in place. If you have any questions regarding this Blog Post, please Contact Us. Please read our website DISCLOSURE carefully for additional information.