News & Insights
January 29th, 2021

The Year Ahead With Matt Ko, CFA®, T. Rowe Price

It’s a new year, and with COVID-19 vaccine distribution underway across the globe, it’s time to look forward to what we believe will be better times. What can investors anticipate for the markets this year? Matt Ko, a member of one of the most highly regarded multi-asset strategy teams in the industry, shares his vision for 2021.

The market outlook for 2021 and beyond

  • There may be pockets of volatility in the near term; however, 2021 should be a year of recovery and the economy is poised to do well.
  • Government stimulus provided unprecedented support in 2020, and we expect to see additional stimulus this year—but more limited and targeted to pockets of weakness.
  • As the recovery continues and more people start working, there may be some inflationary pressure from the various sources of economic stimulus.
  • Market leaders should continue to dominate the S&P 500, and companies that have not invested in new technology and e-commerce could fall behind.

How to identify investment opportunities

  • Foreign markets could be an area of relative value due to a weakening dollar.
  • Post-pandemic, we should see broader market opportunities, and some of the more cyclically oriented businesses, including banks, financials, industrials, and energy companies, as well as some in the travel and leisure sectors, should recover in 2021.

Why asset allocation is still the biggest decision for your portfolio

  • With interest rates so low, many investors seek an alternative to government bonds for generating a better income stream.
  • A traditional 60/40% (stocks/bonds) portfolio should continue to provide value to investors despite some negative press.