What’s Going On Here?The world’s biggest investment manager BlackRock washed its hands of this year for at least two “Happy Birthdays” this week, and went on to reveal its investing predictions for 2021. What Does This Mean?In an opinion that isn’t all that controversial, BlackRock reckons the distribution of coronavirus vaccines next year will accelerate economic recoveries around the world. And since that means governments, companies, and individuals can be more confident in a post-pandemic economy, BlackRock’s looking past the near-term economic challenges still to come and feeling more positive about the next twelve months. In fact, the company reckons the shock of the pandemic on economies and markets has more in common with the temporary impact of a one-off natural disaster than, say, the lasting effects of the 2008 financial crisis. That’s made the investment manager more upbeat about riskier investments like stocks, and less interested in safer bonds. Why Should I Care?For markets: Stocks, drugs, and rock and roll.
BlackRock is particularly keen on US stocks, especially those in the tech and healthcare sectors that have benefited from the surges in ecommerce, remote working, and medical innovation. It also thinks those with smaller market values – which are more sensitive to the improving economic growth outlook – should outperform bigger ones. The firm has a few picks outside the US too: it’s backing emerging market and Asian stocks, even as it warns investors to stay clear of Japanese and European companies.
The bigger picture: Live fast, die young.
It’s worth pointing out that BlackRock’s prediction is a “tactical trading view” – a 6-12 month outlook based on anticipated market trends. In the longer run, BlackRock actually thinks stocks are too expensive, and that companies will struggle to grow profits and dividends after next year’s done and dusted (tweet this). | 
