Making Predictions in Uncertain Times

Here’s a question we’ve been pondering over the past month or so: How can financial communicators provide clarity when so much uncertainty lingers?

To answer that question, my team has been looking at how our clients are handling their forecasts for the coming year. We’ve uncovered three notable trends:

1. They’re talking about the stock market bubble. The market is up – but the economy is still down. It makes no sense to anyone. Not everyone has been willing to talk about the bubble out loud, but we’ve seen an unusually high number of firms including it in their client communications.

2. They’re in agreement about “safe spaces.” Most firms seem to agree that the safest place for stock investors to ride out the bubble are in small caps, value stocks, and non-U.S. stocks, especially in emerging markets.

3. They’re down on bonds. Most investors balance the risk of stocks with bonds, which doesn’t really work right now. Interest rates are so low that bonds pay virtually nothing. Since rates have nowhere to go but up – and since bonds lose money when rates rise – they’re a risky pick.

Are you interested in reading more about what other companies are saying about investment markets in 2021? Send us an email at admin@purcellcom.com. If there’s enough interest, we’ll send out a summary of all the trends we’re seeing this year.

One trend I hope to see this year: A return to “normal” activities. Drinks always taste better when you’re enjoying them with friends!

Cheers,
KP