10 Themes for 2021

Having navigated the Covid pandemic over the past year, and as we look ahead to the next 12 months, it’s worth remembering this: there will always be another crisis. The next big problem. Some predictable, but many are not. But, when you look back and reflect over the events that occurred in the heat of battle it becomes apparent, with the benefit of hindsight, that these crises often present the best investment opportunities. Over the course of 20 years as an investment manager and investor I’ve seen it time and time again. It’s worth understanding exactly what this means because people are generally uncomfortable with uncertainty, and it’s easy to jump at shadows.

Certainly, in April 2020, with the share market in Australia having fallen 38% in about 4 weeks and the dramatically escalating Covid crisis, it did not feel like that was a fantastic time to invest. But it was. In February 2009, after about 16 months of the GFC crisis and a 56% fall in the Australian share market, it did not feel like that was a fantastic time to invest. But it was. In the face of extreme uncertainty, it is difficult to hold your nerve let alone have the courage to make further investments. But ultimately that is the key. Understanding the interplay within the macro themes, that ultimately impact and shape the future of the world, provides us with the insights needed to have conviction in the investments we hold.

To that end, we’ve outlined 10 key themes facing investors and businesses in the next 12 months. Some represent risks to be managed, others are opportunities, some are both. But in our view, these are all critical themes to keep in mind, as they will shape, not only the financial and economic outlook, but also the future of our society and the world at large. These themes, in order of potential impact, are:

  1. Low interest rates

  2. Stimulus

  3. Covid / Covid vaccine

  4. Economic flow through to business

  5. Continued rise of technology

  6. China risks

  7. Inflation risk

  8. Rise of crypto

  9. Property market evolving

  10. Govt debt

I will be writing more on these themes over the course of the year and look forward to sharing my unique insights on a broad range of topics, some relating to investment, some not. Hopefully you find them thought provoking and interesting.

Regards

Dion Guagliardo

Dion Guagliardo