2021 April Outlook

Following the equity market decline that occurred during 1Q20 as a result of COVID and the lockdowns of economies all over the world, the S&P 500 has now posted its fourth consecutive positive return quarter as 1Q21 has come to an end. The impressive rally has been one that fits the classic Wall Street mantra of “Climbing the Wall of Worry”. With the overall market being up roughly 80% from its March 23rd, 2020 low and all sectors having posted price returns greater than 39%, there has been a lot of dispersion in sector performance.

Indeed, the top six sectors (Materials, Energy, Industrials, Financials, Tech, and CD) are all up nearly 90% while the bottom five (Comm Serv, HC, Real Estate Utilities, and Staples) are only up on average 53%. Hence, there has been quite an opportunity for investors to beat the benchmark S&P 500 by actively managing their sector allocations instead of just buying and holding S&P 500 index fund.

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