Whats the outlook for 2021 and where do we invest money? Simple, straightforward, logical insights from Ruchir Sharma
Here is a summary for you to absorb in 1 minute, detailed 1 hr Interview Link enclosed below.
- 2020 Economy had negative growth of 4% and stock markets had a 13% + growth. In 2021 this trend could be the opposite – as economies boom Stock Markets may slow down
- 2020 Stimulus was 5X of that during the Lehman Crisis, came immediately. Most of it went to savings & Stocks as avenues for spending where limited. 2021 could see pent up spending
- 2021 – Markets are already pricing in higher consumption / Govt will not have any money for stimulus
- Inflation is set to rise and interest rates may go up. Global Inflation has been stable for 20 years ~ 2.8%. Could rise steeply in 2021 driven by labour shortage/ less competition / declining productivity / excess money printing
- Higher Inflation could lead to higher interest rates. In 1980 Global GDP = Valuation of Stock Market, in 2020 Stock markets globally are valued 4X of the Global GDP
- This is a good time to buy property at Fixed interest. Home prices in US / China surging last few years – India declining. Income has been increasing put prices are declining.
- USD is declining after maintain global control for 100 years. Driven by excessive currency printing. In 2020, 5 Tn USD printed
- Distrust in USD is driving alternative Cryptocurrency. Bitcoin emerging as the new Gold. Strong interest in younger generation
- Revival of Commodity cycle after 10 years. Weakness in USD is directly linked to strong commodity cycle
- Developing countries make a stronger comeback. More resilient, faster to change. Digitization share of economy is already high.
- Best companies of one decade perform poorly in the next. New stars will be born.
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