We’re now nearly a full month into 2021, and stocks, bonds, and virtually all other asset classes continue to post excellent returns. The question is…..why? We’re at a point where the market seems to be impervious to bad news. Meanwhile bitcoin and cryptocurrencies continue to post new highs, and college students are even becoming famous for posting their trading strategies on social media. As easy money central bank policies abound across the globe there is a lot of market froth out there. We’re starting to see all the classic signs of a bubble.
Interestingly, equities in small cap and value shares led the pack in the fourth quarter of 2020. This is the first quarter that’s happened for quite a while, but both areas have a lot more ground to cover if they’re to make up for the last decade.
Here’s this quarter’s market update.