Unveiling the Future of End-of-Year Equities: What Secrets Await?

As 2020 comes to a close, now is a good time to look ahead and examine what could lie ahead for the end of year equities. Despite the extensive losses of 2020, many believe that the market will close out the year on an optimistic note, with some analysts predicting that the S&P 500 could return back to its February 2020 high of 3,386 points by the end of December. With the recent news of vaccine success and accordingly, hope of a economic relief, some investors may be tempted to jump on the wave early. However, investor should exercise caution and acknowledge the potential risks associated with investing in the current market. It’s uncertain at this time how much economic damage the pandemic has border and how and when the market will recover from both the human and economic damages done by the virus. This includes the housing market, which by some accounts, has suffered heavy losses and could take a considerable amount of time to recover to pre-pandemic levels. Additionally, investors should be aware of heightened geopolitical threats and the possibility of other external shocks (e.g. the US-China trade war) which can adversely affect the market. Therefore, it is important to study the trends and employ a strategies that is risk-aware and considers FDIC-insured investments as an option. At the end of the day, the basic fundamentals behind investing – diversification across asset categories, proper risk management, understanding of global macro-economic trends and sectors, consideration of macro and micro effects of potential shocks – have, if anything, become even more pertinent in the wake of this year’s events. A mindful approach could be essential in navigating the uncertain months to come and end the year on a positive note.