DETROIT – 2020 has been a unique year with the pandemic, and yet the stock market has done well.
So what are the investment prospects for 2021 and what should you do to protect the money you have already saved?
It’s been more than a decade since the great downturn and auto company bankruptcies, and investors have become used to rising markets again. It’s always a good idea -- as we head into a new year -- to remind everyone that yes, you should invest, be careful and to remember the first rule of investing: diversification.
It may sound repetitive and boring, sort of like talking about budgeting, but the fundamentals exist for a reason.
“So when you look at your investment strategy, it’s important to always be diversified, to not put all your eggs in one basket,” said Planning Alternatives Certified Financial Planner Nathan Mersereau.
One of our favorite financial websites is TheDollarStretcher.com. Its founder and editor, Gary Foreman, said a diverse portfolio is likely to not be impacted by market changes because what could impact one investment negatively will affect something else positively.
A focus on diversity is more important than ever as the economy recovers, but financial markets always look further down the road.
“We could see some serious inflation in upcoming years, but we could also see or see some serious deflation,” Foreman said. “What what I suggest to people is try to keep balanced so that you’re OK no matter which direction the markets go.”
While deflation means a period of prices declining, which sounds good for a consumer, it’s not good for businesses.