In the wake of last week’s tumult at the Capitol, the unfolding of senatorial contests in Georgia, and the ratification of the presidential vote, a miasma of apprehension has enveloped the investment community. This sentiment was vividly captured in our most recent poll of newsletter subscribers, where nearly three-fifths voiced their preeminent anxiety lies with the country’s tumultuous state—eclipsing concerns for their well-being or the financial system at large.
Despite these turbulent times, our subscribers report a steady conviction towards their investment strategies, with minimal inclination towards significant portfolio alterations in the year 2021, as gleaned from a survey executed from January 8th to the 12th. Throughout the rollercoaster that was 2020, their investment ethos remained unwavering, gravitating towards the behemoths of the U.S. equity market, notably within the realms of technology and healthcare. This strategy bore fruit amidst the year’s paramount challenges: the resurgence of the pandemic and the unpredictability surrounding the U.S. presidential election. The perspicacity of investors to maintain composure regarding their financial commitments paid dividends as the stock market soared to unprecedented heights.
Key points to remember
- 59% of readers are most concerned about the state of the nation
- 23% think the S&P 500 will fall in 2021
- 26% plan to make their portfolios riskier in 2021
- 16% choose Tesla as the stock they most want to own
Hope for future returns
In our latest juxtaposition of investor sentiment, gleaned from surveys conducted in December and now, it emerges that aspirations for stock market yields in 2021 have tempered slightly. This shift could primarily be attributed to the relentless advance of COVID-19 and the emergence of its new strains, casting a shadow of doubt among investors. Indeed, 28% of respondents have pinpointed the pandemic and its mutating versions as the paramount market jeopardy for the year ahead, overshadowing fears of unforeseen catastrophic events (14%) and potential escalations in societal discord (11%).
However, a stalwart 17% of our readership still harbors optimism for substantial financial gains within this annual cycle, despite a noticeable uptick in anticipations of a market retraction since our December canvass. Furthermore, a more considerable fraction of our audience, now at 23%, prognosticates a downturn in the S&P 500 by 0% to 10% or perhaps even more this year—a stark contrast to the mere 9% harboring such gloomy outlooks just a month prior.
US large-cap stocks still in favor
While aspirations for substantial financial uplifts may have dampened, a strong preference remains among our readers for large-cap U.S. equities in 2021, with the technology, pharmaceutical, and healthcare domains continuing to be their bastions of choice. This strategic alignment yielded favorable outcomes in 2020, yet there’s a burgeoning curiosity in the smaller cap sphere and burgeoning markets, both of which have begun the year on a strong footing, eclipsing many traditional sectors in performance.
Concurrently, Bitcoin and the broader cryptocurrency fervor have not gone unnoticed by our audience, whose interest has been piqued to levels not observed since the zenith of 2017. The allure of Bitcoin, alongside its digital brethren, has seen a remarkable resurgence, as evidenced by the soaring inquiry rates on Investopedia concerning these tokens. This swell in curiosity underscores a yearning not just to understand but potentially to partake in the cryptocurrency euphoria that bridged the transition from 2020 into 2021.
One stock to rule them all
Surveying our diverse readership, spanning ages 18 to 80 with a predominant demographic of avid investors between 40 and 75 years, we posed a provocative question: If constrained to select merely one stock for ownership, which would it be? The outcome scarcely startled us. Tesla (TSLA), the vanguard in electric vehicle innovation, emerged as the frontrunner, captivating 16% of our readers’ favor following an astonishing 700% ascent in its stock value during 2020. Apple (AAPL) trailed narrowly, securing the allegiance of 14% of our constituency, who admire the tech behemoth’s continued evolution and market dominance. Amazon (AMZN) clinched the third spot, with 9% of participants esteeming the e-commerce colossus as their solitary investment choice.