A Post-Election Economic & Market Outlook In 10 Charts Or Less

Figure 8_FOMC 2021

Translation: A generally positive environment for “risk on” assets.


When focusing on what we believe are the primary market “signals,” we conclude that 2021 will enjoy a generally positive economic and market environment. Our caveats to that conclusion are (1) uncertainly regarding the coronavirus and governmental response, (2) the outcome of the Georgia Senate races, (3) the outcome of fiscal stimulus negotiations, (4) current valuations, which in many areas are very high by historical standards and therefore perhaps unsustainable, regardless of the market environment, and (5) currently unforeseeable “unknown unknowns” (e.g., U.S.-China relations, Iran, etc.).

So, while we are cautiously optimistic in our outlook for 2021, we continue to recommend focusing on a longer time horizon and the construction of “all-weather” portfolios, diversified at both the asset class and risk factor levels, so that your portfolios can handle whatever may come their way…even an unforeseen “crazy train.”

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