Q1 2021 Investment Outlook

In an early January article, ACE Wealth Partners put forward an optimistic outlook for the markets in 2021. Although the stock market was choppy and a little stubborn, the first quarter 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. Add this to nearly $3 trillion in government stimulus along with a pent-up demand for consumers to spend money when they feel comfortable and you have a significant upside scenario.

Even with the DOW (Dow Jones Industrial Average) as all-time highs, many economists and institutional investors are quickly revising their expectations even higher. So how did they arrive at this conclusion? Fast and effective vaccinations along with aggressive fiscal stimulus. The U.S. has rolled out rapid vaccine deployment along with a decrease in Covid-19 data that has allowed states to start the process of opening in the first quarter.  Add this to the American Rescue Plan Act signed in early March which has led to economic data consistently surpassing expectations in the United States with the rest of the world not far behind. Of course, there is never a perfect economy and the predicted “4wave” of Covid-19 has slowed the stock market for the time being. Often the markets going flat for a period of time or even a correction is a healthy “time out” for the markets to then continue surging.

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 a huge amount of fiscal stimulus.  Among them include rising interest rates and inflation. The prediction of rising markets also includes the assumption that the vaccines will be effective, and Covid-19 will be mitigated through the summer into the fall.

What does this all mean?   As is always the case with investing, there will be volatility as the world works through a global pandemic. Although the outlook is positive through the end of the year, a correction will not be surprising followed by a quick rebound. 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.