WHERE TO INVEST IN 2021
Kiplinger's Personal Finance|January 2021
With the election in the rearview mirror, investors can turn their full attention to the economic recovery and progress on the pandemic.
ANNE KATES SMITH
WHERE TO INVEST IN 2021

How can the outlook for anything in 2021 not be an improvement on 2020? Stocks are certainly poised for a strong performance as progress combating the pandemic, an economy on the mend and strong corporate profits pave the way for continued gains. Rotten year though it was, however, in the end, 2020 may be a tough act to follow for investors.

Since our last investing outlook, the S&P 500 index has gained 15%, or 17% including dividends. For 2021, we’re looking for returns more along the lines of high-single-digit to low-double-digit percentages. But if we’re wrong, it will likely be because we’re too conservative. (Prices, returns and other data are through November 6, when the S&P 500 closed at 3509.)

The new year will be transitional in many ways. When it comes to your portfolio, that means a mix of old and new leaders may work best. Large, U.S. growth-oriented stocks—which ironically do best when overall economic and profit growth is tepid—still have much to recommend them while the economic recovery is nascent and uneven. And many are in industries you’ll want exposure to for the long term. But in 2021, it will pay to bet on the recovery, with economically sensitive stocks, small- and midsize-company shares, and overseas holdings, particularly in emerging markets.

“My expectation is that 2021 will be a tale of two markets,” says Kristina Hooper, chief global market strategist at Invesco. The pivot from one to the other will depend on broad distribution of an effective vaccine, she says— an inflection point that investors grew decidedly more hopeful about following recent good news on a vaccine being developed by pharmaceutical giant Pfizer and biotech firm BioNTech.

Denne historien er fra January 2021-utgaven av Kiplinger's Personal Finance.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

Denne historien er fra January 2021-utgaven av Kiplinger's Personal Finance.

Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.

FLERE HISTORIER FRA KIPLINGER'S PERSONAL FINANCESe alt
FREE HELP FOR COLLEGEBOUND STUDENTS
Kiplinger's Personal Finance

FREE HELP FOR COLLEGEBOUND STUDENTS

This program’s mentors assist applicants as they fill out the FAFSA, write essays and more.

time-read
2 mins  |
December 2024
WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS
Kiplinger's Personal Finance

WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS

You typically need earned income to contribute to an individual retirement account, but a spousal IRA provides an important exception to this rule.

time-read
2 mins  |
December 2024
SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS
Kiplinger's Personal Finance

SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS

ET'S say you've been regularly buying shares in a booming tech company over the past few years, but now you want to start taking some of those profits, perhaps to rebalance your portfolio.

time-read
5 mins  |
December 2024
Strategies for Novice Investors
Kiplinger's Personal Finance

Strategies for Novice Investors

AS part of a lifes kills program for young, single mothers, I was asked to teach a class on how to get on top of your finances.

time-read
3 mins  |
December 2024
ANSWERS TO YOUR 529 PLAN QUESTIONS
Kiplinger's Personal Finance

ANSWERS TO YOUR 529 PLAN QUESTIONS

Thanks to recent policy changes, families have more options for what to do with money sitting in these tax-advantaged accounts.

time-read
6 mins  |
December 2024
Rate-Cut Winners and Losers
Kiplinger's Personal Finance

Rate-Cut Winners and Losers

NOW that the Federal Reserve has cracked the interest rate ice, the next development will be to separate winners from losers.

time-read
2 mins  |
December 2024
SHOULD YOU BUY THESE RED-HOT FUNDS?
Kiplinger's Personal Finance

SHOULD YOU BUY THESE RED-HOT FUNDS?

Covered-call ETFs are popular but come with plenty of caveats.

time-read
6 mins  |
December 2024
DIVIDEND STOCKS ARE READY TO REBOUND
Kiplinger's Personal Finance

DIVIDEND STOCKS ARE READY TO REBOUND

Our favorite dividend payers are poised to benefit as falling interest rates lure investors back.

time-read
10+ mins  |
December 2024
IS A 55+ COMMUNITY RIGHT FOR YOU?
Kiplinger's Personal Finance

IS A 55+ COMMUNITY RIGHT FOR YOU?

These age-restricted developments appeal to older adults seeking abundant amenities and an active lifestyle.

time-read
8 mins  |
December 2024
AT LONG LAST, RATES ARE DROPPING
Kiplinger's Personal Finance

AT LONG LAST, RATES ARE DROPPING

Consider these portfolio moves now that the Federal Reserve has cut its benchmark interest rate.

time-read
4 mins  |
December 2024