We’ve Had Big Gains in 2020: Where Are the Opportunities in 2021?

 

Despite the disaster of Covid-19, 2020 has been a profitable year for savvy investors.

Our top picks have seen strong returns. Generating big profits for those courageous enough to invest following the Covid drawdown.

As Christmas draws near and I prepare for a welcome break from the city, I reflect on where the big returns from 2020 have come from. 

It was awe-inspiring how much money flowed as economies went into lockdown.

The markets were on a knifepoint. Scared of businesses everywhere being unable to operate and sell their wares. Scared that many of these businesses would fall over.

Then central banks around the world began pumping in money. Ventilating economies gasping for air. The mostly older men that run these banks were in a hurry this time. They had ‘learnt lessons’ from the GFC.

Here in New Zealand, the more than $13b of money pumping that replaced wages for months could have built 65,000 homes. Or three new Auckland harbour crossings. Or a nuclear power plant to power the whole North Island, so we’d never need to burn coal again.

I tell you this because there have been big gains in stock prices. And property prices. Since the frightening drawdowns of mid-March.

A savvy investor must now ask some questions. Are these gains real? Have we really paid for Covid? Were the old men at central banks in a dangerous hurry? And what is in store in 2021?

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Simon is the Chief Executive Officer and Publisher at Wealth Morning. He has been investing in the markets since he was 17. He recently spent a couple of years working in the hedge-fund industry in Europe. Before this, he owned an award-winning professional-services business and online-learning company in Auckland for 20 years. He has completed the Certificate in Discretionary Investment Management from the Personal Finance Society (UK), has written a bestselling book, and manages global share portfolios. Simon is a shareholder of Wealth Morning.


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