Cautious optimism, Take 2: Despite wild 2020, financial experts remain bullish on markets for 2021 … with caveats, of course

File photo Joseph Lebel of OceanFirst Bank.

Financial sector prognosticators told ROI-NJ last year that they were “cautiously optimistic” heading into 2020 — on the heels of a decade-long bull run in the market.

After a tumultuous year, there’s still plenty of caution. And, if 2020 is any indication, it’s hard to know exactly what to be cautious about.

But, with the market resuming its bull run after a bear market interruption in March, there’s also just as much optimism. Joseph Lebel, the newly appointed president of OceanFirst Bank, said there’s just not a strong case for pessimism.

“The main thing is that we’re seeing clarity around vaccines, even if there’s some questions about what the estimated timing is,” he said. “As it becomes more widely available, we believe the consumer and business community will look forward to a brighter 2021.”

People continue to struggle, and Lebel knows some businesses are, too. He’s hoping the government does what it can to provide support to industries that are going to take a long time to rebound, even if what Lebel expects might happen actually does transpire: People start to spend in earnest in the third and fourth quarter of 2021.

Douglas James. (Saddle River Financial Group)

Financial planner Douglas James offered a word of advice heading into not just a new year, but a new White House:

“The biggest thing I’ve been telling people is that you have to separate political views from your investments. Sometimes, when you have someone who is heavily conservative, they might have a concern about Democrats that leads them to skew investments one way, and the reverse happened with (President Donald) Trump’s election.”

James, managing director at Saddle River Financial Group, called it a “recipe for disaster” to base your financial picture on your personal politics.

He, like Lebel, expects the second half of 2021 could feature an explosion of consumer activity. Assuming that life doesn’t return to the same normalcy as expected that quickly, James anticipates the low interest rates will keep people pouring money into equities over bonds, regardless.

“I keep hearing concern (from clients) that there might be a major bubble stockwise,” he said. “And, while there are some things overdone in the market, what people sometimes miss is that stocks are a function of whatever alternative investment there is to buy.”

Equities remain attractive heading into 2021, James said.

Although a lot depends on personal situations, he believes the next few years might feature more of a “stock picker’s market.” In the past few years, putting money into an index such as the Standard & Poor’s 500 would’ve netted a nice return. Looking ahead, he says investors might need to get more selective.

Overall, James is — no surprise — cautiously optimistic.

“A lot remains to be seen about how the holidays might lead to a surge of cases over the next few weeks, or how much vaccines and people being careful will allow it to dissipate,” he said. “But, I’m still hopeful that, even if economic activity is muddled through the first half of 2021, that we’ll see a surge later.”