We believe that interest rates, fiscal stimulus and the vaccine rollouts may all signal stronger GDP growth in 2021 lifting stocks and hurting bond returns.
One of the outcomes of the virus has been the resurgence of retail stock trading. Remember the day traders who stopped working and traded dot-com stocks for a living? Well, today’s day traders are better organized, better educated, with better tools and maybe different motivations.
Financial markets ended the year strongly. News of a vaccine, a national election and further stimulus all contributed to investment optimism about an economy being reopened and confidence in new leadership.
This is part of a series on stock selection research. You can find the introductory blog here.
When you are deciding whether to invest in a company, you are not just deciding which company to buy -- you are also choosing which investors to join with. You get a share in the company, but you also find yourselves in a relationship with others who have done the same. They can affect your life because they can affect the company that they own along with you. So smart investors need to look beyond the company itself and to the potential peer group of investors, because some types of investors are part of the problem, whereas some are part of the solution.