will climb to 3,800 by the end of 2021—a 6% gain from current levels—but the path won't be a straight ride up, and the team cautioned on near-term risks. In a 2021 outlook note, strategists led by Savita Subramanian laid out two rules every investor should follow for the next 12 months. "Historically, lengthening one's time horizon is a recipe for loss avoidance: 10-yr S&P 500 returns have been negative just 6% of the time.
"The best days usually follow the worst days for the market. Since the 1930s, if an investor sat out the 10 best return days per decade, his/her returns would be just 19% compared to >16,000% returns since then," the strategists added.93 units with another 122 under contract: How Emma Powell built a king-size real-estate investment portfolio leveraging a simple strategy
Bank of America has an overweight rating for financials, energy, tech, and healthcare, while rating consumer staples, communication services, and real estate as underweight for 2021. Subramanian said the top two sectors—financials and energy— are "unapologetically cyclical and value-focused," and reflect BofA's preference for value stocks over growth stocks.
However, in the three-month period after the last 14 recessions, a value strategy has outperformed a growth strategy said Subramanian. She added that the Rusell 1000 value benchmark has a higher projected earnings growth than the Russell 1000 growth benchmark."The recovery is intact and the world likely re-opens in the 2H, but a lot of optimism is priced in already on vaccine/recovery.
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