Published Tuesday, January 5, 2021 at: 8:46 PM EST
Just before the beginning of every year, 10 top Wall Street investment strategists are asked by Barron’s, the century-old financial magazine, to predict which industry sectors will outperform and underperform the Standard & Poor’s 500 stock index for the year ahead.
Fritz Meyer, an independent economist, whose content is licensed by this firm, has tracked the results of Wall Street’s predictions in Barron’s every year since 2007, based on the Barron’s survey of Wall Street’s top strategists. The accompanying infographics show Wall Street’s inconsistent results for the 12 months ended Dec. 31, 2020.
In Dec. 2019, nine of the 10 strategists said financials would outperform. Sounds like a sure thing? Nope! Financial stocks lost 4% in 2020. That’s a major miss, considering the S&P 500 – which is comprised of the 10 industry sectors, shot up by 16.3% in 2020.
Similarly, stocks benefiting from increased discretionary spending by consumers were picked to outperform the S&P 500 by three strategists, while four predicted they would underperform. Although consumer discretionary was panned by more strategists than those who favored it, it was the second-best performing sector of 2020, with a spectacular 32.1% gain.
Technology stocks, a perpetual favorite with Wall Street, were a good pick for 2020, as was health care. However, another favored sector, energy, lost a stinging -37.3% in 2020. (Let us know if you would like a special report about the "math of losses"-how much it takes in future gains to offset prior losses.)
Based on the data compiled annually since 2007 by Fritz Meyer (an independent economist widely praised by independent financial professionals for many years), Wall Street’s best minds are shown to be chronically inconsistent in predicting which industry stock sectors will be the best or worst performing during a particular calendar year.
An important investment idea to remember in 2021 is this: Strategic investing is not preoccupied with predicting what happens tomorrow or in the next 12 months.
Wall Street pundit’s predictions make great magazine covers but have nothing to do with investing strategically over the long run.
Nothing contained herein is to be considered a solicitation, research material, an investment recommendation, or advice of any kind, and it is subject to change without notice. It does not take into account your investment objectives, financial or tax situation, or particular needs. Product suitability must be independently determined for each individual investor. Tax advice always depends on your particular personal situation and preferences.
The material represents an assessment of financial, economic and tax law at a specific point in time and is not intended to be a forecast of future events or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete, and is not intended to be used as a primary basis for investment decisions.
Any investments or strategies referenced herein do not take into account the investment objectives, financial situation or particular needs of any specific person. The material represents an assessment of financial, economic and tax law at a specific point in time and is not a guarantee of future results.
This article was written by a professional financial journalist for Advisor Products and is not intended as legal or investment advice.
Retail sales dropped sharply in December and business-owner optimism plunged but events in the Washington, D.C. overshadowed everything. Yet share prices of America’s blue-chip stocks did not drop very much
Interest rates are important to investors and they are currently at or near all-time lows. At this past June’s Federal Reserve meeting, interest rates were kept at a range of 0%-0.25% and it was indicated that they will remain ne...
Securities and Advisory Services offered through FSC Securities Corporation, Member FINRA/SIPC. Additional advisory services offered through Zephyr Investment Management, a registered investment advisor in the state of California, not affiliated with FSC Securities Corporation.
This communication is strictly intended for individuals residing in the states of AZ, CA, CO, CT, DC, FL, HI, ID, IN, MA, NC, NM, NV, NY, PA, OR, UT, and WA. No offers may be made or accepted from any resident outside the specific states referenced.
IMPORTANT CONSUMER INFORMATION
A Broker/dealer, investment adviser, BD agent, or IA rep may only transact business in a state if first registered, or is excluded or exempt from state broker/dealer, investment adviser, BD agent, or IA registration requirements as appropriate. Follow-up, individualized responses to persons in a state by such a firm or individual that involve either effecting or attempting to effect transactions in securities, or the rendering of personalized investment advice for compensation, will not be made without first complying with appropriate registration requirements, or an applicable exemption or exclusion. For information concerning the licensing status or disciplinary history of a broker/dealer, investment, adviser, BD agent, or IA rep, a consumer should contact his or her state securities law administrator. Information is also available at www.adviserinfo.sec.gov and brokercheck.finra.org.