SAFETY LAST: RISKY INVESTMENTS SOARED AT START OF 2021

Who needs safety when the world’s about to get back to normal?

Risky stocks seen as nearly untouchable a year ago burst to the market’s best performances during the first three months of 2021, headlining a fourth straight quarter of gains for the S&P 500. Stocks of airlines, oil producers and banks soared on expectations that COVID-19 vaccinations and massive spending by the U.S. government are setting the stage for a roaring economic recovery this year.

They’re part of a flip-flop for the market’s leaderboard, as investments seen as the safest and most reliable earlier in the pandemic suddenly fell to the back of the pack.

The tumbling around within the market has sometimes been chaotic — witness the sudden surge for GameStop in January, as a band of smaller-pocketed investors pumped up the struggling video-game retailer’s stock to levels way beyond what analysts thought was rational. But to a casual observer, the shifting tides have remained mostly beneath the market’s surface.

The S&P 500 logged its mildest quarterly swing since the summer of 2019, even as prices for risky investments climb high enough to raise more alarm bells that a dangerous bubble may be forming. Here’s a look at some of the winners and losers of the first quarter:

BANKING ON A REVIVAL