President Joe Biden and the stock market outlook for 2021 – Statement

How do you see the global economy developing in 2021? Will the Chinese economy continue to grow and pull the rest of the world with it? Now the US elections are over and President Biden has been inaugurated. The most common question I am asked these days is how it will affect the stock market. Every year Wall Street experts come out with their predictions for the coming year, and year after year most of them get it wrong. A few years ago I quoted a classic Bank of America Merrill Lynch market outlook forecast. “2017 is possibly the least safe year in years, with above-average risks and a number of outcomes that have dramatically different outcomes: euphoria or bubbling, significantly higher or lower than the base case.” This approach uses fancy terms and expressions and says nothing. Wow binary results! That is, the market will either go up or down. What a prediction!

In this week’s Torah section we read about the last of the 10 epidemics and the exodus of the children of Israel from slavery in Egypt. Regarding Moses, the leader of the young nation, we read in Deuteronomy 34:10: “Never again has a prophet like Moses appeared in Israel, whom the Lord singled out face to face.” While Moses was the greatest prophet, the ever lived, and was one of a select group of people who experienced this phenomenon, the prophecy ended over 2,400 years ago! But for some reason everyone thinks they can accurately predict the future. As I have written several times in this column, my mother of blessed memory liked to say, “The fools have been given prophecy.”Is it important?

cnxps.cmd.push (function () {cnxps ({playerId: ’36af7c51-0caf-4741-9824-2c941fc6c17b’}). render (‘4c4d856e0e6f4e3d808bbc1715e132f6’);});

if (window.location.pathname.indexOf (“656089”)! = -1) {console.log (“hedva connatix”); document.getElementsByClassName (“divConnatix”)[0].style.display = “none”;} About a month after the election, I spoke to a client who asked me what I thought about the election results and the markets. I said I was concerned about the outcome of the Georgia Senate election, and if the Democrats both win and control both Congress and the presidency, I am nervous about what seems to me to be getting on the express train towards socialism in the US . He said to me: “You let your political inclinations influence your market view!” I’ve been thinking about his line for almost a month, and I think he was right. I believe there will be higher taxes and more regulation and that the government will reward those who have acted irresponsibly by borrowing money they cannot repay and canceling their outstanding debts. Throw in the fact that, in my humble opinion, the tech sector is behaving the same way it did in the lead up to the burst bubble in March 2000. So why was my client right? Because none of these problems has a lasting impact in the history of markets. As I have already written several times, the markets fall an average of 10% once a year. Just turn the clock back 11 months. We went up, then Covid hit and the markets lost 35% in 5 weeks. Nobody remembers it like they don’t remember the crashes in 1987, 2000 and ’08 -’09 because the markets have come back all the way and are back to record levels. Nobody likes to see a big drop in their portfolio, but if they want to invest in stocks they need to understand that they will also have to suffer from the bad markets to get a big reward in the long run. And for a bit of optimism, data from CFRA shows that in years the Democrats were in control, the S&P 500 average profit was 9.8%.How can you benefit?I know I sound like a broken record, but the way to create wealth is to buy good investments and keep them. Should the market fall, buying more has proven very profitable time and time again. If short-term market moves make you nervous, either you don’t initially have a company investing in the stock market, or at least it’s a sign that you need to recall your exposure to stocks. As Warren Buffet said, “I never try to make money in the stock market. I assume they could close the market the next day and not reopen it for five years. “Investors need to remember that there are no short cuts when it comes to investing. What happens in the long term in 2021 is not so relevant to the stock market. Do you want to create wealth in the long term? Stay focused and disciplined with your investment portfolio, don’t panic and make sure your investments are in line with your goals and needs. The information contained in this article reflects the author’s opinion and does not necessarily reflect the opinion of Portfolio Resources Group, Inc. or its affiliates. Aaron Katsman is the author of Retirement GPS: How to Navigate to a Safe Financial Future with Global Investing.; [email protected]

Comments are closed.