The accelerated vaccine rollout means we face a significant inflection point for economies and markets. Market participants are trying to incorporate this into portfolio construction and asset allocation, perhaps aware that, historically, economists and analysts have had a tendency to underreact to inflection points.
The economist JM Keynes was also an enormously successful investment manager. His advice was “to devote our intelligence to anticipating what average opinion expects the average opinion to be.” In other words: focus on what the consensus forecast is, considering what is discounted, and think about how that consensus view could gravitate over time.
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