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Investing

Key takeaways from our Outlook 2021

Our most important thoughts for the new year are here. Find out what you need to know.


 

The Private Bank Global Markets Council

Our Top Market Takeaways for December 4, 2020.

Key takeaways from our Outlook 2021

As we turn the page from 2020 and look ahead to 2021, we are excited to share our Outlook 2021: The global economy will heal. Embrace the optimism. Just when this year felt the most dire, the forces of human ingenuity and determination set us on a brighter path. Frontline healthcare staff and essential workers have kept us going during the pandemic. Today, the scientific community is on the cusp of delivering a vaccine in record time. We have also seen communities around the world come together to push for a more fair and equal society, and we hope to see further progress in the future. And from a financial perspective, the collective efforts of governments, central banks, consumers and businesses, all moving in the same direction, will help the global economy heal from the COVID-19 crisis.

This year’s outlook includes both an interactive web experience, alongside our full report. In it, we discuss what we think will be the key drivers of the recovery in 2021, the risks, and our top investment ideas. In true Top Market Takeaways style, we wanted to bring you the key points. Here we go:

  1. The global economy will continue to heal from the coronavirus pandemic.
  2. We expect output in parts of Asia and the United States to surpass pre-pandemic levels while Europe and Latin America lag. China has already recovered lost output.
  3. Investors should be critical of excess cash holdings.
  4. Global equity markets will likely reach new highs.
  5. We expect equities to outperform high yield bonds and core fixed income. High yield bonds remain an anchor for portfolio returns.
  6. Interest rates will likely rise modestly as the economy heals, but they should remain near secular low levels.
  7. We are focused on three key themes to guide our investment decisions: navigating volatility; finding yield; and harnessing megatrends.
  8. Risks to our view include economic malaise catalyzed by ineffective virus containment, governments and central banks failing to provide sufficient policy support, the tech war between the United States and China, and geopolitical flashpoints.
  9. Core fixed income still provides the most efficient protection against equity volatility.

And last, but certainly not least, the one key point we want to underscore in any given year is to have a plan. We believe this young recovery could last for years. But before you act on this kind of optimism, make sure you have a solid, long-range investment strategy that aligns with the goals you have for yourself and your family. Planning holistically is the only way you can truly build—and keep full confidence in—your investment portfolio. As you look for opportunities and meet the challenges that 2021 will bring, we will be there to help you and your family achieve your financial goals.

For more, you can interact with this year’s Outlook here.


All market and economic data as of December 2020 and sourced from Bloomberg and FactSet unless otherwise stated.

We believe the information contained in this material to be reliable but do not warrant its accuracy or completeness. Opinions, estimates, and investment strategies and views expressed in this document constitute our judgment based on current market conditions and are subject to change without notice.

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  • Past performance is not indicative of future results. You may not invest directly in an index.
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  • Additional risk considerations exist for all strategies.
  • The information provided herein is not intended as a recommendation of or an offer or solicitation to purchase or sell any investment product or service.
  • Opinions expressed herein may differ from the opinions expressed by other areas of J.P. Morgan. This material should not be regarded as investment research or a J.P. Morgan investment research report.

 

 

 

 

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  • The MSCI China Index captures large- and mid-cap representation across China H shares, B shares, Red chips, P chips and foreign listings (e.g., ADRs). With 459 constituents, the index covers about 85% of this China equity universe. Currently, the index also includes Large Cap A shares represented at 5% of their free float adjusted market capitalization.
  • The Standard and Poor’s 500 Index is a capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The index was developed with a base level of 10 for the 1941–43 base period.
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This material is for informational purposes only, and may inform you of certain products and services offered by
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