The attached note provides a review of 2020 in terms of what it meant for economies and investors and takes a look at the outlook for 2021.

The key points are as follows:

  • 2020 was dominated by the coronavirus pandemic but shares saw okay returns on the back of policy stimulus and vaccine optimism – resulting in constrained but positive returns for balanced growth super funds.
  • For 2021, the combination of massive policy stimulus and the prospect of vaccines allowing a return to something more normal by end 2021/early 2022 should see a decent rebound in economic growth.
  • This plus lower interest rates is likely to see solid returns from share markets but poor returns from bonds. Australian shares are likely to be relative outperformers.
  • The main things to keep an eye on are: coronavirus and vaccines; China tensions; inflation; as well as the hit to immigration in Australia and its impact on home prices.

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