Although the global recovery began to be priced in last year, the current pro-cyclical rotation is likely to continue. Because of the dollar’s weakness, we prefer emerging markets, but Japan has other things going for it that, at the very least, can help balance out the portfolio.
2021, a pro-cyclical year for global equities
In a year of economic recovery, the risk/ reward ratio is generally favourable to equities. Although some countries, particularly in Europe, are still in lockdown, the month of January is starting well with the release of the vaccines, the Brexit deal, and a Democratic victory in the US Senate conducive to a major recovery plan.
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