Welcome, 2021!! On this week’s episode of Financial Clarity for Doctors host, Corey and Rachelle start the year off with their predictions for the new year and help you with the tools to best structure your finances to handle unexpected events.
2021 Predictions
- Deep dark tunnel until at least mid-2021, however, we can see the light
- Increasing optimism about the vaccine and economic
- What will investor sentiment be moving forward?
Links and notes:
2020 World Economic Outlook from IMF - https://www.imf.org/en/publications/WEO/Issues/2020/01/20/weo-update-january2020
- Modest growth ~3% in US, 2% Eurozone, 4.5% emerging markets, no mention of a virus
- 2020 was a wild year, so let’s throw that away as an outlier
2019 World Economic Outlook from IMF - https://www.imf.org/en/Publications/WEO/Issues/2019/01/11/weo-update-january-2019
- Modest 3.5% global GDP growth, highlighting trade tensions as biggest risk. Actual: 2.5% (data.worldbank.org)
- Expected crude oil to remain “just below $60”/barrel for 2019-2020 (at $45 today)
- Side note, clean energy stocks up over 100% trailing 12 months (Dec 2019-2020) S&P Global Clean Energy Index
- “deteriorating sentiment about growth prospects” in stocks driving bond yields down.
- 2019, emerging market stocks performed the worst (MSCI EM Index)…were up 18.5%. Large cap US stocks up 31.5% (S&P 500)
- US 10 year treasury at 2.71% on 1/1/2019, 1.76% 1/1/2020, so rates did drop.
Every Year, Modest Growth Tends to be the prediction
- All the big institutions have growth estimates for US stocks, cautiously in the 5-7% range.
- Historically, S&P 500 has averaged about 10%/year. Rarely does it ever fall between 8-12%.
- S&P 500 Last 20 years: 2019 +31%, 2018 -4%, 2017 +22%, 2016 +12%, 2015 +1%, 2014 + 14%, 2013 + 32%, 2012 +16%, 2011 +2%, 2010 +15%, 2009 + 26%, 2008 -37%, 2007 +5%, 2006 +16%, 2005 +5%, 2004 +11%, 2003 +29%, 2002 -22%, 2001 -12%, 2000 -9%
For more financial planning tips from Corey and Rachelle find them on LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance
Discussions in this show should not be construed as specific recommendations, legal, or investment advice. Always consult with your investment professional before making important investment decisions. Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Securities offered through Cambridge Investment Research, Inc., a registered Broker/Dealer, Member FINRA/SIPC. Finity Group and Cambridge are not affiliated.
