Though no one can predict the future, economists and stock market analysts insist several common themes will emerge in the year ahead.  Prepare accordingly and your portfolio will increase in value through 2021.  Let’s take a look at the top investing themes likely to arise in the forthcoming year.

The Country’s Economic Recovery Will not be U-shaped

Some economists insist we are at the start of a U-shaped economic recovery.  However, the ensuing economic rebound is unlikely to form the perfect shape of the letter U.  Rather, there will be some undulations ahead, meaning it will take the entirety of the year or longer for the economy to return to the level it was at prior to the pandemic. 

The bottom line is it will take time to vaccinate the public.  Furthermore, there is concern that coronavirus vaccines might not prove as effective against variant strains.  Add in the fact that it will take time to replace restaurants, hotels and other hospitality industry businesses that have closed for good and the recovery is likely to prove all the more choppy.

There Will be a Heightened Focus on Earnings

Wall Street analysts anticipate a robust earnings rebound.  It I quite possible that many publicly traded companies outside of the hospitality and restaurant industries will report 20% or higher earnings per share growth in the year ahead.  Keep in mind earnings are typically revised higher as opposed to lower after recessions so there is reason to hope for earnings reports that catalyze a market-wide bull run.

Socially Responsible Investing Will Continue Through ’21 and Beyond

ESG investing, short for environmental, social and corporate governance, will continue to trend upward in the year ahead.  Though ESG has been in existence for decades, it is likely to prove even more popular in 2021 as more justice-oriented millennials and members of the Generation Z age cohort enter the market.  Add in the fact that the left-leaning Biden administration combined with a blue Congress will reinforce the importance of environmental/social justice and investors have all the more reason to ride the ESG wave to riches.

The US Dollar Might not be as Strong as Most Assume

The worldwide economic recovery combined with an expanding budget deficit here at home along with a slow economic recovery will hurt the dollar.  Add in the reduction of trade restrictions with China likely to be implemented by the Biden administration and you have even more reason to be skeptical of the dollar’s strength in the year ahead.

The Oil Industry Will Rebound…to a Certain Extent

Though 2020 was a difficult year for the oil industry, the upcoming year might be a different story.  Economic activity is likely to return to normal levels by the summer, meaning that much more oil will be purchased, likely spurring a long-awaited industry recovery.  However, the Biden administration has made it abundantly clear it will pass legislation and provide funding that bolster the renewable energy sector so savvy investors will keep their oil/gas industry exposure within reasonable parameters.


Utilizing an ESG investment strategy may result in investment returns that may be lower or higher than if decisions were based solely on investment considerations.

There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Opinions expressed in the attached article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.