2020 has been a year like no other

The year 2020 has been challenging in more ways than one. As the corona virus let itself into our life day by day and month by month, normal life, as we saw it, completely changed. And, not necessary for the best. As the number of COVID 19 cases rose relentlessly, infecting lakhs and taking the lives of thousands, the world was stunned. Persistent lockdowns wreaked further havoc, as people were forced to stay indoors, suffocating the freedom they were used to Masks, sanitisers, washing hands repeatedly, working from home and staying locked in at home became the new normal.

Not to mention, the dismal scenario meant a severe jolt to the economy. With any venue for expenditure, be it shopping or travelling going out of bounds, the markets were faced with a crisis like never before. The volatility struck both the investors and the market watchers with the same force. No one could predict what lay in the future, given the unpredictability of the pandemic. No clear direction on how to handle or treat the unique infection and no vaccine in immediate sight only made matters worse. Let us take a month-by-month view of how 2020 panned out for the global markets.

2020 was definitely a year of unpredictable shocks and surprises as the pandemic took control of our lives. The market and the government too reacted in unpredictable ways while governments & central banks, the world over, went into overdrive to support their economies and financial systems with surplus liquidity. Volatility was, nevertheless, the name of the game.

Investors with sound wealth advisors could have come out of this year unscathed and potentially even surprised themselves with the returns on their portfolio, exceeding the bleak expectations formed when the markets were beaten down. The year taught everyone the importance of proper asset allocation and disciplined investing and sticking to your long-term goals.

Looking forward, our CEO Mr. Nitin Rao believes that investment strategies in the coming year (2021) should factor in the answers to some of the questions below:

Will 2021 be a year when vaccine execution will result in economic catch ups of lost businesses, making broader market indices resume their normal steady trajectory?
Will the impact of costly valuations create 10-15% corrections, before catching up and exceeding current levels?
Will credit growth coming through the economy create a strong small cap/ midcap rally through 2021 giving strong returns?
Will 2021 be the year of value investing?
Will pharma sector investing be a steady theme considering that pandemic type events will now always be on our risk radar?
Will gold after a period of consolidation continue its rally, due to easy liquidity?

At InCred Wealth we will continue to think five hops ahead to identify the opportunities and themes relevant for the time.