The financial year will begin tomorrow, Monday, January 4, when the bell rings in the markets and the first prices of the exercise are crossed. The vaccine approaches the return to normality after the nightmare of the covid-19 .

In addition, fiscal and monetary stimuli will remain in force. These three ingredients should be enough to guarantee investors another good harvest. However, nothing is as simple as it seems (and less in the world of money), so you will have to know how to read the game very well to get some polish from your savings.

The Stock Exchanges, as a leading economic indicator , have already discounted during 2020 part of the recovery expected for 2021; For its part, in the fixed income market, especially in the sovereign debt segment, there is little left to scratch with negative interest rates in a large part of the yield curve after the decision of the central banks to open the floodgates and provide liquidity to mansalva.

The market will continue to provide good opportunities, but returns could be lower than those of 2020. That is why experts advise highly diversified portfolios, both in assets and geographically, and an active management of investments because volatility will continue to be the dominant trend.

“The markets reacted very positively in November to the result of the elections in the United States and the advances in vaccines. Global stock indices ended the year positive, led by Wall Street and Japan, and the debt markets, both public and private, also posted gains for the year as a whole.

This scenario is better than expected six months ago, but on the other hand, it complicates the management of portfolios in the short and medium term, since the valuations are now more demanding ”, describes Óscar del Diego, investment director at Ibercaja Management.

Equities remain the favorite choice of managers and analysts for 2021. The question that many ask in their strategy reports is whether the equity market is not starting to be expensive after the impressive rebound accumulated since March.

And the most common answer is that it may be in historical terms, but not when compared to the other investment options. “Valuations are a source of concern. Everything seems to be expensive right now, but what is expensive may also seem cheap for some reason.

The possibility of a recovery in corporate profitsit is grounded in light of the economic outlook. Valuations do not usually spoil the stock market party while corporate profits rise, ”they argue in Julius Baer.

The coronavirus crisis has caused a huge spread. The balance of 2020 leaves clear winners and losers in the Stock Market. The performance differences are considerable both by country and by sector. In the case of the countries, the United States, China and Japan were the clear winners.

The US Dow Jones index reached December 30 (the day of this edition) with an annual increase of 6.89%, the Japanese Nikkei had a 16.01% gain and the Chinese CSI 300 a 24.83% .

On the other hand, in Europe the general trend, except in Germany and Italy, was the red numbers. The Ibex 35 once again led the stock exchange caboose with a decline of 14.53%. Nor was it a good year for Latin American parks.

Will this geographical dichotomy continue in 2021? “It makes sense to be overweight in equities, but the regional allocation will have to adapt throughout the year to reflect the new context. It is logical to bet on the most lagging Stock Exchanges , but it is also important to have an active management.

Greater economic stimuli or a rapid immunization of the population will favor Europe, Latin America and South Asia. However, the United States, China or Japan will continue to function as a safe haven, ”says Joseph Little, chief strategist at HSBC Global AM.

The other great dispersion that occurred in 2020 was the sectoral one. The lockdowns accelerated the digital transformation and the clear winners were the technological values. Proof of this was the impressive rise in the Nasdaq ( 43.62%).

On the other hand, the industries most linked to tourism, services and leisure dragged on like a lost soul. For this reason, the great debate that divides analysts at the moment is whether the supremacy of growth stocks (read above all technology) will remain over value stocks (more mature sectors) or linked to the economic cycle.

Allianz Global Investors believes that it is necessary to seek “a balance” in a stock market that appears uncertain. “It is possible that value stocks will begin to regain ground versus growth stocks”, They say in the German manager.

Opinion shared by Scott Glasser, Chief Investment Officer, ClearBridge: “The cyclical and value-oriented sectors that have suffered the most from the pandemic shutdowns are the most attractive.”

On the other hand, Santander Wealth Management & Insurance advises taking positions at the two ends of the spectrum of corporate profit growth, maintaining exposure to the values ​​favored by new future trends, but rotating from those that increased the most in 2020 towards less business. explored.

“We also advise progressively increasing exposure to the industries hardest hit by covid-19 to benefit from a recovery scenario and return to normalcy,” they add in the Santander division.

If equities continue to be the preferred investment option for 2020, it is not only due to its own merits (improved profits, economic growth environment) but because of the little way that experts see their natural alternative: fixed income.

The bond market is distorted by the intervention of central banks, a circumstance that will continue into the new year. The profitability offered by government bonds – it must be remembered that in debt the profitability moves inversely to the asset price – is at historical lows.

Furthermore, in developed countries, this profitability is negative in almost all cases, which, together with forecasts of interest rates equal to or slightly higher, lead BBVA AM to recommend underweight these bonds in portfolios. “However,

The diversification that a year as complex as the one that has just started requires advises investors, always in doses linked to their degree of risk tolerance, to consider the option of private debt to incorporate it into their portfolios.

Of course, you will have to be very selective because, as with stocks, the valuation of corporate credit no longer offers bargains. In March, when the virus spread globally and panic gripped the market, corporate bonds became a very attractive financial asset in terms of risk-adjusted expected returns.

Since then, the credit spread has been narrowing; the asset has had very positive returns, and therefore now the expected return for the next twelve months is moderate or even low.

Where analysts see the greatest potential – not without warning of its danger because until the economic recovery is consolidated, the probability of default or suspension of payments will be high – is in the issues of those companies with a worse credit rating.

Also known as junk bonds, they offer a higher yield than other fixed income issues (in return, the investor assumes a higher risk of default.) “The high liquidity of central banks supports the search for profitability in the high yield segment.

However, it must be done in a selective way, as there are still reasons to be cautious in some companies affected by the coronavirus ”, they explain from Deutsche Bank.

A key aspect to achieve maximum profitability is always the subject of currency. There are instruments in the market to hedge the fluctuations in exchange rates, but they also carry a cost. In general, experts believe that in 2021 the weakness of the dollar that was already seen during 2020 will consolidate.

In the worst of the pandemic, the greenback asserted its reputation as an active refuge, however, as strict confinements are They were rising, the euro was appreciating against the dollar, a trend that accelerated after the victory of Joe Biden in the US presidential elections.

Since March, the American currency has gone from almost touching parity to changing to 1.22 dollars per euro. “The magnitude of the Federal Reserve’s economic response to the economic challenge of the coronavirus is unmatched by any other postwar intervention.

Most importantly, the U.S. central bank has changed its commitment to price stability by promising that it will tolerate higher inflation from now on. In our opinion, all these circumstances speak in favor of the currencies of Europe, Japan and China ”, appreciate the experts of Julius Baer.

It is striking how in the investment strategies that fund managers, investment banks and analysis houses have sent to their clients in recent weeks there are numerous calls to try to anticipate long-term trends. Many of these structural changes have been accelerated by the pandemic. The most obvious is that of the energy transition.

More and more money is seeking to invest in sectors that contribute to curbing climate change. “It has been really encouraging to see the profitability of sustainable investment products in 2020. Which shows us that this type of investment is no longer considered a luxury or something that savers can only afford to think about during a bull market,” he says Nicholette MacDonald, from Schroders.

Another of the investment trends that has taken hold has to do with the digitization of the economy. “The growth rates of companies that had a digital advantage were extraordinary last year. When the pandemic comes to an end, we may see slower growth rates in this sector, but I don’t think many people will cancel their Netflix subscriptions or return their Peloton bikes, ”argues Chris Buchbinder, manager of Capital Group.

The other big long-term growth pole for experts is China. “It has prevented the new waves of contagion of the virus that have emerged in other countries.

In addition, the Government’s five-year plan is committed to the transition to growth driven by domestic consumption. If we add to that that its capital markets have become more mature, we think that this could be the decade of Asia in terms of profitability in the market, similar to the role played by the United States during the last cycle ”, they conclude from JP MorganAM