- 59% of readers are most concerned about the state of the nation
- 23% think the S&P 500 will fall in 2021
- 26% plan to make their portfolios riskier in 2021
- 16% choose Tesla as their most desired stock to own
Last week’s violence at the nation’s Capitol, the outcomes of the Georgia senatorial races, and the certification of the presidential election have all combined to create a cloud of concern over investors’ heads, according to the results of our latest reader survey. Nearly 60% of our newsletter readers said the “state of the nation” is their biggest worry, far outpacing their health or the economy on their list of concerns.
That said, our readers are maintaining their slight bullishness, and few are planning to make big adjustments to their portfolios in 2021, according to the survey conducted from Jan. 8 to Jan. 12. Their risk profiles have remained relatively consistent throughout 2020 as they have leaned into large cap U.S. equities, particularly in technology and health care. Those choices fared well in 2020 when the biggest risks were the resurgence of the virus and uncertainty around the U.S. presidential election. Investors were smart to be worried about both, but smarter to have left their portfolios alone as the stock market made one record high after the other.
Hope for Future Returns
Compared to our December reader survey, investors’ expectations for 2021 stock market returns have cooled a bit. The continuing spread of COVID-19 and its new variants could be the main reason for their hesitation, with 28% choosing that as the biggest 2021 market risk compared to another black swan event (14%) or more social unrest (11%). While nearly 17% of readers still expect significant returns in 2021, there was an increase among those who are expecting a downturn in the stock market compared to our December survey. Plus, 23% of our readers now think the S&P 500 will fall anywhere from 0%-10% or more in 2021, while only 9% of our readers were that pessimistic last month.
U.S. Large Cap Equities Still in Favor
While expectations for big gains may be muted, our readers continue to favor large cap U.S. equities as their asset of choice for 2021, particularly in technology, pharma, and health care. That combination served them well in 2020, but there is a growing interest in small caps and emerging markets, which have outperformed most sectors in the early days of 2021.
Bitcoin is also becoming more interesting to our readers who couldn’t escape the mania surrounding cryptocurrencies as 2020 turned to 2021. To wit, search interest in Bitcoin and other tokens on Investopedia has skyrocketed in the past month, reaching levels we haven’t seen since 2017.
One Stock to Rule Them All
We asked our readers, who range in age from 18 to 80, but are mostly aged between 40 and 75 and actively invested, which single stock they would own if they could only own one. The results were not terribly surprising. Tesla (TSLA) topped the list with 16% of our readers choosing the electric-vehicle maker, which saw its share soar 700% in 2020. Apple (AAPL) was a close second, with 14% of our readers selecting the automaker, and Amazon (AMZN) was third, with 9% of readers choosing the e-commerce giant as their top pick.