This week, I’m talking about the 2021 Stock Market & Economy Outlook.

Today, I’m talking about the 2021 stock market outlook. If I told you in late March when the economy shut down and the stock market drop had it’s swiftest and sharpest decline ever, that the stock market would reach all time highs just 6 months later, most of you would have laughed, some of you would have argued with me, and nobody would have agreed with me.

Yet, the stock market recovered from the shortest bear market on record to rally to new all-time highs by late September. In fact, as of this recording  the tech-heavy NASDAQ finished up +42.7% for 2020, the S&P 500 Index is up +14.6%, and the industrial heavy Dow Jones is up +5.8%. What made this all possible was the stimulus that went to consumers and the PPP loans that kept businesses afloat during the shutdown. 

The recession and the stock market drop would have no doubt been much deeper without government intervention. But what about looking ahead to 2021? Will that trend continue? Will the stock market continue to touch new highs this year? 

In our 2020 year-end commentary to clients, we at True North believe 2021 will look much different than 2020. The darlings of this year (mostly tech stocks) and many other untested companies have skyrocketed to astronomical heights. At some point the music will stop and someone will be left without a chair. 

We think monies will flow into high quality dividend payers as well as neglected areas such as cyclicals, financials, and small cap growth companies in 2021. I’ll talk more about that tomorrow when I cover the outlook for the likely winners in 2021, but for now, it seems likely that 2021 will be a good year for stocks - perhaps with high single digit ir double digit returns for the S&P 500, on the heels of an economy that will likely continue it’s recovery. 

As the vaccine gets injected into us Americans and as life hopefully begins returning to normal by mid-year, I would expect to see strong earnings, capital spending, buybacks, and higher dividends - all of which spells good news for the stock market. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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