As we end 2020 many of us are eagerly awaiting the new year and new possibilities. Some of those possibilities are looking toward investments. Maybe you got a bonus this month and want to make good use of it. Maybe you’re looking to diversify your retirement portfolio. Will 2021 bring us good fortune? Will the impending COVID vaccine help or hinder the stock market? The overall feeling is one of optimism for the stock market. Here are some of the factors professional investors reported on when looking at next year’s investments.
As we all know, the election this year was eventful to say the least. It also came after an eventful drop in the stock market in March followed by a surge in the S&P 500. Looking into the new year, we will have the inauguration of Joe Biden as well as the advantages of a split government. Historically a divided government has helped the stock market improve. Even though Biden supports tax increases on the rich, the stock market still rose the eve of election day when he was taking a lead at the polls.
We have seen how the pandemic has impacted both personal and public finances since March 2020. Monthly unemployment rose to 14.7% nationally in April after we started seeing shutdowns due to the pandemic. Surprisingly, unemployment has since dropped to 6.7% at the end of November. A vaccine is touted as key to returning to normal life. Besides returning to work, how does this help you in your investing? One of the suggested stocks to invest in during 2021 is Johnson & Johnson (JNJ) which is one of the companies that have stake in the race to creating a Covid vaccine. A vaccine will certainly positively impact pharmaceutical stocks throughout the year.
On the back of a successful vaccine, the travel industry is looking forward to a boost in their economy. According to Forbes, they are keeping the hope returning back to normal life will boost airline, hotel, and even cruise line profit margins. After seeing stocks sold off like hot potatoes at the beginning to the pandemic, airlines have begun to see improvement in profits with the expected release of the Covid vaccine. The pandemic has made many businesses use virtual tools, such as Zoom. Even still, air travel is one industry to keep tabs on because it is time saving for travelers around the world. Take a look at this article for more information on which stocks to keep an eye on, invest in, and the why behind mentioning them.
For many investing professionals 2020 has been a year of uncertainty. Some suggest the best call for investing is investing in low risk and forgetting about it. Why? As we have seen in 2020, the stock market can see a major downturn in the first quarter but end the year with great numbers. It is wise to consider this before pulling out your stock or investing in stock.
The year is closing with a pandemic still going strong but the promise of a successful vaccine. Investors hope and believe this will improve 2021 and the investment opportunities the year brings. This along with a split government, new president, and potentially more stimulus money could make 2021 a very great year for small and large investors alike.