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2021 Market Trends Thumbnail

2021 Market Trends

Investing Insights

Technology, medicine, and science are not only defeating COVID-19, but they are also forming the platform for future battles ahead. Quicker responses, less harm - faster comebacks against the next monster.

The rising tide of Gen Y is not stopping. On a daily basis, you won't "see" it. It is there, it is rising and it is relentless. All businesses will be redefined, changed, or overrun.

Margins are increasing. Earnings are increasing. By mid-summer, all that will be focused on is 2022 earnings already targeting $200/share for the S&P 500. And that projection possibly timid - meaning closer to $205-$210 by the time we get a year out from here and are peering into the fog of 2022.

Everything Will Work Out Fine

When the short-term painful windows of 2021 do visit our doorsteps, it will be important to embed the image of the underlying current in your mind. It is unlikely the media machine will get any friendlier in the New Year for investors. After all, we know that "Everything is going to work out fine" is not a profitable, ad selling, or click driving headline.

Acclimating to All-Time Highs

This is a tough topic as it causes many to strain over the perception of risk. After the last 20 years, with two 50% drops, one Great Financial Crisis, and a Pandemic shutdown with a 35%, 3-week waterfall panic - there is no wonder that fear emotions run deep. 

It is completely understandable that many anticipate a steep cliff coming after 2-3 days of strong red ink. Lots of those nightmares have come and gone over the last 39 years. The overriding lesson? Try not to move when the fight or flight syndrome is tugging at your mind. 

Our minds are not very good at comprehending upside when we are accustomed to creating boundaries in our understanding of the larger picture. In essence, it is as difficult to embrace a DOW 40,000 now (when it has never been there), as it was for someone in 1982 to embrace a DOW 1,400 since it had never been there either at the time.

This will continue onward for every generation. Numbers will adjust, levels will adjust, perceptions will adjust - all while definitions of "correct value" and "overvalue" will also adjust over time. 

Ignore The News

Yes, there is another crash coming. Yes, there is another correction coming. Indeed, the stats above from the last 50 years are VERY likely to look a good deal like the next 50 years. Let us not forget also that worrying about a crash is not a symbol of "out of the box" thinking - or even a slightly contrary view.

The Good News?

Even as stresses continue to roil the system — do not get overly emotional or panic.

Look what is coming. The next generational wave. There are 88 million individuals poised to enter the workforce in the near years. 

  • Change will be the only consistent theme. 

  • Disruption will be an understatement. 

It does not mean we do not care about tough spots.  It merely means that our responsibility is to guide you through them - keeping you on your roadmap - even when it looks lost and desolate.

Getting caught in the negative, disheartening, emotional details of every pitfall ahead will merely get you what that data above shows:  you will remain fearful even as prices, values, and opportunity in the darkness all work together to continue a steady climb over time.

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