FULL ‘BULL’ AHEAD // INVESTING
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‘BULL’ AHEAD INVESTMENT EXPERTS SAY 2021 HAS ALL THE RIGHT INGREDIENTS
BY JAMIE ZACHARY
C
ontinued fiscal and monetary responses around the world to the COVID-19 pandemic, combined with little inflation and low interest rates, have all the makings to support a long-term bull market, say experts. Brian Belski, chief investment strategist with BMO Capital Markets, says environments like the one we’ve entered in 2021 have historically supported continued stock market gains. “We see no reason why 2021 will be any different,” says Belski, who co-authored BMO’s Investment Strategy 2021 Market Outlook with Nicholas Roccanova, Ryan Bohren and Andrew Birstingl. “Yes, valuations appear stretched at first glance, but they also need to be considered within the context of historically low interest rates and little inflation, ingredients that are likely to persist throughout 2021 and beyond.”
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FEBRUARY 2021 // BUSINESS IN CALGARY // BUSINESSINCALGARY.COM
Belski says it’s reasonable to expect market valuations to sustain or even expand slightly from its current level. In addition, he anticipates corporate earnings growth will recover sharply from pandemic lows – particularly during the second half of 2021 since much of the damage was lockdown specific and not necessarily related to companies themselves. “In fact, aside from the global financial crisis, 2020 represented the swiftest quarter-over-quarter earnings collapse for the S&P 500 where index EPS plummeted nearly 50% during the first quarter,” he says. “Thus, we anticipate that 2021 has the potential to be one of the best years ever in terms of earnings growth – something we believe will also help to push stock prices higher.” Liz Lunney, head of portfolio management at ATB Wealth, agrees there is room to run in the equity bull market
