Wells Fargo Securities has come out with its top ten predictions for the next year. It is interesting considering the pandemic situation, and many businesses are hoping that the availability of vaccines will put them back to their normal position in 2021.
Wells Fargo’s Top 10 Predictions For 2021
One of the biggest predictions made by Wells Fargo is with regards to Tesla becoming the new AOL for investors. Chris Harvey of Wells Fargo Securities said AOL did not keep pace with changing technology, and it lost its sheen in the market. He warned that Tesla could also see a similar fate in the near future, and Apple can become a huge threat to the company if it starts manufacturing self-driving vehicles in the future.
He also emphasized that the charts need not look good for investors to get into the stocks. He warned that the covid-19 changed the entire landscape, and companies need to be resilient to such pandemics in the future. As an investor, it is important to secure your portfolio against such shocks by the pandemic.
He also predicted that the GOP might retain control of the Senate. This is an interesting analysis as many people in the market hope for this situation. They do not want absolute control of power with a single party, and the market always prefers power to be divided between the democrats and republicans. In this way, major changes will not happen that can affect the markets in the near future.
As the next year will still struggle due to the covid-19 pandemic, business experts feel that large caps may underperform average stocks by some margin. If you are planning to have a Portfolio that is completely made up of large caps, it is better to diversify the portfolio and include some small stocks in order to get better returns.
Another interesting analysis about the markets comes with the resurgence of small caps. Several companies that are able to withstand the economic slowdown due to the pandemic may bounce back in 2021, and they can give good returns to investors. You should always keep a watch on exciting small caps that are resilient to slow down in this situation.
Financial experts also said that things could change drastically in the next six months and investors need to be aware of cycles in the market. It does not take much time for things to change in the markets these days. Investors should always keep an eye on the latest happenings and take necessary actions to safeguard their portfolios.
Experts are of the opinion that the winners of 2021 will look a lot different than the stocks that outperformed in 2020. Investors may begin to lose interest in growth in 2021. The momentum may not continue in the next year as the overall economic growth will be better due to the availability of vaccines.
In this year, stocks that were resilient to the covid-19 pandemic continued to rise irrespective of their valuations. However, when it comes to 2021, things may be entirely different as the market will provide a level playing field for all the stocks.
The economic growth will be better than expected if mass vaccinations are able to control the pandemic in the next few months. The Pharma Companies which did well in 2020 may continue the trend in the next year. It may be many months before the majority of Americans can get vaccinated, and the Pharma sector will be in demand throughout the next year. Considering the overall optimism in the market, it is safe to assume that investors have to rearrange their portfolios and not depend on the winners of 2020. This will help them to get better returns in the future.