Investment outlook for 2021

At the start of a new year I like to write an investment outlook for the year ahead as well as glance back at last year's outlook to see how it fared. Naturally, my musings on trends for 2020, which included the US election and the ongoing US-China trade war were soon thrown into sharp relief by the coronavirus pandemic, a black swan event that literally and figuratively stopped us all in our tracks. It impacted every economy on the planet, not to mention the devastating cost to human life.

In terms of how markets performed in the face of this catastrophe, some produced surprising results and exceeded expectations from 12 months ago. We reported at the end of 2019 that most investment banks were predicting a modest rise in the S&P 500 index over the course of 2020, with outliers Morgan Stanley and UBS suggesting it could experience a fall to 3000 from its starting point of 3100, while BTIG predicted it would end the year at 3450, although 3950 was a possibility.