Where to Invest in 2021

With the election in the rearview mirror, investors can turn their full attention to the economic recovery and progress on the pandemic.

illustration of 2021 forecast
(Image credit: Illustration by Andrea Ucini)

How can the outlook for anything in 2021 not be an improvement on 2020? Stocks are certainly poised for a strong performance as progress combating the pandemic, an economy on the mend and strong corporate profits pave the way for continued gains. Rotten year though it was, however, in the end, 2020 may be a tough act to follow for investors.

Since our last investing outlook, the S&P 500 index has gained 15%, or 17% including dividends. For 2021, we’re looking for returns more along the lines of high-single-digit to low-double-digit percentages. But if we’re wrong, it will likely be because we’re too conservative. (Prices, returns and other data are through November 6, when the S&P 500 closed at 3509.)

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Anne Kates Smith
Executive Editor, Kiplinger's Personal Finance

Anne Kates Smith brings Wall Street to Main Street, with decades of experience covering investments and personal finance for real people trying to navigate fast-changing markets, preserve financial security or plan for the future. She oversees the magazine's investing coverage,  authors Kiplinger’s biannual stock-market outlooks and writes the "Your Mind and Your Money" column, a take on behavioral finance and how investors can get out of their own way. Smith began her journalism career as a writer and columnist for USA Today. Prior to joining Kiplinger, she was a senior editor at U.S. News & World Report and a contributing columnist for TheStreet. Smith is a graduate of St. John's College in Annapolis, Md., the third-oldest college in America.