Video: Outlook 2021 - time for investors to stop hibernating

Keith Wade, Chief Economist & Strategist:

“This is the first year in my 30-year career of forecasting the world economy, that I can remember such enormous switches and falls in GDP. There is still a risk of what we call a ‘W shape’ – a double dip recession – where Europe or the US could go back into recession later on this year as more lockdowns are introduced.”

“Looking forward, as recovery comes through, people will begin to think about interest rates going up and inflation going higher. It is possible that inflation beings to pick up, but I think it will be very slow because there is lots of spare capacity in the world economy at the moment.”

“Asia appears to have handled the pandemic better, and it looks to be in much better shape than the west as the world emerges from the crisis. The focus on goods and technological production, healthcare, has meant that that region has done particularly well.”

Johanna Kyrklund, Chief Investment Officer and Global Head of Multi-Asset Investment:

“Our models are now pointing to recovery and an ‘early Spring’. The vaccine news is encouraging because it significantly reduces uncertainty. We’ll still need governments’ stimulus to support us while we wait for the vaccine.”

“We believe that governments should be able to run the economy hot. Also, we’ve seen an acceleration in disruptive trends, which are very exciting to us as active investors.”

“Overall, we are positive on equities because with the recovery on the horizon, we think it’s time to shift out the ‘stay at home stocks’ that outperformed in 2020 and shift into the more cyclical areas of the market. It’s time to stop hibernating!”

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