It’s been a year of fear for many Americans: The worst global pandemic in a century has taken more than 300,000 lives, battered the U.S. economy and propelled the stock market into the fastest crash in history.
But markets have since staged a stunning turnaround and reclaimed record highs, defying the doomsayers despite a backdrop of historic job losses, bankruptcies and shrinking corporate profits. The market was driven higher by Big Tech stocks as trillions of dollars in stimulus from the Federal Reserve and Congress propped up an economy gripped by recession.
So while the COVID-19 death toll is staggering, the stock market is telling Americans to be optimistic about 2021, experts say.
Why? The economy is expected to continue recovering with a vaccine on its way. And Wall Street professionals expect another good year for investors.
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That sort of optimism was hard to imagine after trillions of dollars in market value was wiped out in March, when stocks plunged 34% a month after hitting record highs. But the head-spinning crash also left investors with beaten-down stocks at bargain prices.
“The stock market is the only place where things go on sale and people leave screaming,” says Ryan Detrick, chief market strategist at LPL Financial, an independent broker-dealer. “Now that we’re back at records, it’s a harsh reminder to people that the stock market is a forward-looking mechanism and sees better times ahead.”
Jimmy J. Tran, 40, is one of those Americans who jumped at the opportunity to scoop up stocks in the downturn after learning from past mistakes.
Following the aftermath of the Great Recession, he was saddled with student debt from his MBA program. It was a scary time for him, he says, because he was worried about making ends meet after his job offer got pushed back for five months.
After that experience, he was on a mission to become financially independent. Over the past decade, he started chipping away at his student loans and began investing more in real estate to grow his personal wealth.
When the pandemic hit in the spring, he was laid off from his job at a commercial real estate firm. He decided to pursue other passions. Now Tran is a full-time investor and small business owner at Code Ninjas in Dallas, Texas, a coding franchise set to open in early 2021 where children learn STEM skills.
“My advice for anyone working in corporate America is to always have other interests or side hustles that they can pursue if they suddenly don’t have a job,” says Tran, who used the market drop earlier this year as an opportunity to max out his IRA contributions for himself and his wife for 2019 and 2020.
“I was preparing, saving, investing for years to accumulate a nest egg,” says Tran. “The key is to keep your personal balance sheet…
Go to the news source: Here’s what Wall Street is predicting for 2021