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Financial Health
December 8, 2020

Markets forge forward into 2021

In its 2021 outlook, Wells Fargo Investment Institute offers insight on how post-pandemic investment opportunities could arise.

In 2020, investment strategists often used terms like “unprecedented” and “resilience” to help investors navigate market activity. Now, terms like “recovery” and “resolution” are being used to describe expectations for 2021 in the newly released Wells Fargo Investment Institute report, “2021 Outlook: Forging a Path Forward.”

“As we turn the calendar into 2021 and simultaneously exhale (albeit through our masks), serious questions call for clarity and resolution,” said Darrell Cronk, Wells Fargo Investment Institute president and chief investment officer for Wells Fargo Wealth and Investment Management.

The report notes how a COVID-19 vaccine, post-election politics, and other factors could impact investments in the coming year. Within it, research-based insights addressing what’s ahead for different asset classes are offered by leading Wells Fargo investment strategists, including Sameer Samana, senior global market strategist; Tracie McMillion, head of Global Asset Allocation Strategy; Brian Rehling, head of Global Fixed Income Strategy; and John LaForge, head of Real Asset Strategy for Wells Fargo Investment Institute.

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What is the outlook for an end to volatility in 2021?

We’re not going to see an end to volatility in 2021, said Tracie McMillion, head of Global Asset Allocation Strategy for Wells Fargo Investment Institute.

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Do you believe there could be another short recession?

Even a brief recession in 2021 is unlikely, said Brian Rehling, head of Global Fixed Income Strategy for Wells Fargo Investment Institute.

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How do you see the incoming Biden administration affecting the economy?

For the most part, we would anticipate very few changes, said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute.

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What do you believe is ahead for U.S.-China trade relations?

We would think that it would be very difficult for the Biden administration to roll back many of the measures that were put into place by the Trump administration, said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute.

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What potential new policies should investors watch out for?

Big lifts like tax legislation probably are much less likely to occur in 2021, said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute.

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What do you believe is ahead for the Fed?

I don’t see the Fed tightening policy or raising rates in 2021, said Brian Rehling, head of Global Fixed Income Strategy for Wells Fargo Investment Institute.

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How much cash should an investor hold?

Investors should hold enough cash to cover expenses for at least three to six months, said Tracie McMillion, head of Global Asset Allocation Strategy for Wells Fargo Investment Institute.

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What is your outlook for renewables?

You’ll probably see more investment opportunities in 2021 in renewables, said John LaForge, head of Real Asset Strategy for Wells Fargo Investment Institute.

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