Here is the stock market outlook for 2021


This year, too, bonds yielded little or no interest. But gold has also weakened a bit recently. Is there nowhere more money to be made but the stock markets? asked three experts. discussed the prospects for the coming year with the financial market experts Michal Wittek, Marco Herrmann and Reinhard Pfingsten. Bonds weren’t really fun this year either. How high is their share in your customer accounts?

Reinhard Pfingsten works at Bethmann Bank as Chief Investment Officer and is a member of the management team of the global investment center of the ABN Amro Group.

Reinhard Pentecost: You could already make money with bonds, after all, declining yields mean, conversely, price gains. But it’s true, now you have to think carefully about where you want to get in. The proportion in the customer accounts depends on the respective risk profile.

Marco Herrmann: For foundations and church communities, for example, bonds usually account for more than 65 percent. For the classic wealthy customer, the proportion is more like 30 percent and below. Regardless of this, the proportion has steadily decreased in recent years.

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Michael Wittek is portfolio manager at Albrecht, Kitta & Co. Vermögensverwaltung and is responsible for the asset management’s investment strategy.

Michael Wittek: We are less defensively positioned there. In a classic strategy, the bond quota is around 20 percent. And how is that distributed among bonds from industrialized countries, emerging countries and companies? Do you also invest in high yields?

Wittek: We practically no longer invest in government bonds from industrialized countries. We recently invested in Chinese government bonds. In this way, we achieve both currency diversification and a comparatively attractive current interest rate. We have also invested in the local currencies of the emerging countries, which is equivalent to a high-yield investment in terms of the risk-reward profile.

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Marco Herrmann has worked for renowned banks and fund companies since 1992. As Managing Director, he has been responsible for FIDUKA’s investment strategy since 2010.

(Photo: Thomas Niedermueller /

Herrmann: Corporate bonds clearly represent the majority. Selectively, of course, high yields are also included. In this way, at least an acceptable return can be achieved with bonds.

Pentecost: Generally we try to invest where there are still positive returns. This is becoming more and more difficult with investment grade bonds, especially since you still buy risks. Where the risk profile allows, we prefer to use emerging market bonds. You have to look closely at high yields. It is very likely that there could still be some bankruptcies and defaults in this area. As before, note beacons are mainly buying government bonds on a large scale. Against this background, can prices even fall and interest rates rise?

Herrmann: Of course, there will be fluctuations again and again despite the central bank purchases. In sum, the investors are still bigger than the central banks – and if everyone wants to get out at the same time, there will not be enough liquidity in the market in the short term. Liquidity is a general problem in the bond market. A large part of the paper is in principle not easy to trade.

Wittek: We see it similarly. It will be very interesting to see whether investors will “test” the central banks next year. Because without the central banks’ purchases over the long term, interest rates would probably rise. From what level of interest would these become dangerous for the indebtedness of the states and for the real estate markets?

Pentecost: A rule says that debt sustainability is given as long as economic growth is greater than the interest burden. This is of course just a very simple rule of thumb, but it does make it clear how important economic growth is.

Wittek: If you are honest, the absolute number is not decisive for the states in Europe. Most of the bonds are held by the ECB and are de facto interest-free. Because the interest income represents a profit for the ECB and thus flows back to the states. Actually everything is wonderful. The states are taking on massive debts by issuing bonds. The central banks buy these and at the same time push interest rates down. The national debt is thus largely free. Where is the mistake?

Herrmann: As long as the population and investors do not lose their trust in our financial system, the game can be played for decades. Japan is the best example of this. In a crisis of confidence, inflation could get out of hand and lead to economic turmoil.

Wittek: Yes, exactly. Should the trust give way, the house of cards will collapse. However, it does not look like that for the next few years. The fear of Corona drove the gold price to a new record this year. But good test results for vaccines and positive economic expectations put the precious metal under pressure from autumn. Is that the rally?

Wittek: We see this correction as only temporary. The loose monetary policy with low or even negative interest rates, the spending-friendly fiscal policy of the states and the expected ongoing weakness of the US dollar – they should all support gold in 2021 as well.

Pentecost: Yes, but not necessarily immediately. The persistent economic optimism should weigh on the gold price for some time to come. We do not expect an upturn until the middle of next year. However, we shouldn’t see the $ 2,000 an ounce again before the end of 2021.

Herrmann: We, too, are in principle positive for the precious metal. Against the background of a rapidly increasing debt combined with low interest rates, we are expecting the gold price to continue to rise, although a similarly strong performance as in the past year is no longer to be expected. We are currently experiencing a second corona wave. And the renewed lockdowns make further stimulus programs likely. Isn’t the environment so bad for gold after all?

Whitsun: Even if the number of infections is currently increasing again and there are new lockdowns, many investors are already looking to the future and positioning themselves for the upturn. Gold is just having a hard time there at the moment. There are also no other drivers, for example interest rates can hardly fall.

Herrmann: Yes, exactly. The vaccine hope lets many investors think outside the box, so that gold is only in focus in the short term. In the medium to long term, as just mentioned, it looks better. With oil, it was almost the other way around recently. Here the price has risen due to positive economic expectations. Will we see an oil price rally in 2021?

Herrmann: We should have already seen most of the rally. Before the pandemic stalled the world, Brent oil cost between $ 50 and $ 70 a barrel. The warehouses are full and demand is nowhere near the same as before.

Pentecost: yes and no. Fundamentally, it doesn’t look so bad for oil at first. The economy is picking up and the demand for oil is picking up. Then, under the new US President Joe Biden, the shale oil producers will no longer have it as easy as under Donald Trump, which can put a strain on the supply side. We are therefore positive for the oil price. However, the difficult budget situation in many oil-producing countries is likely to be problematic. Although OPEC + has agreed to increase production volumes only slowly, many countries are urgently dependent on higher revenues from oil production. Ultimately, the oil price then depends on the discipline of the OPEC + countries.

Wittek: We actually expect fixed prices. The oil price is likely to continue the upward trend it started in April 2020. The vaccines appear here as a real game changer in the supply-demand situation. Because the wells shut down during the crisis had only been moderately revived by the end of 2020. Strong demand in the second half of the year will continue to drive the oil price. Nevertheless, more and more investors are turning away from fossil raw materials for climate reasons. So the demand for corresponding investment vehicles should tend to decline?

Pentecost: The demand for investment vehicles is indeed likely to decline. The fact is that more and more investors are placing value on sustainable investments. Of course, oil doesn’t go with it.

Wittek: It’s easy to think. However, oil consumption will also be high in the next few years. With the economy and population growing, it will be some time before fossil fuel consumption drops noticeably. Where do you think you will be able to earn money for your customers outside of the stock markets in 2021?

Wittek: We favor gold here as a counterpart to the massive expansion of the money supply and oil as an expression of economic strength.

Pentecost: It is true that stocks will be the main source of returns. In addition, there are still interesting bond segments, for example emerging markets. They benefit from the low US interest rate level and the weak US dollar. One can also think about industrial metals. But these are at most admixtures.

Herrmann: We see attractive opportunities in high-yield bonds and subordinated bonds from companies with good credit ratings (investment grade). Gold should also have further potential.


This publication is for informational purposes only and for use by the recipient. It does not constitute an offer or an invitation by or on behalf of Albrecht, Kitta & Co. Vermögensverwaltung GmbH, FIDUKA Depotverwaltung and Bethmann Bank to buy or sell securities or investment funds. The information contained in this publication has been compiled from sources that are considered reliable. However, Albrecht, Kitta & Co. Vermögensverwaltung GmbH, FIDUKA Depotverwaltung and Bethmann Bank give no guarantee with regard to their reliability and completeness and do not accept any liability for losses that might arise from making use of this information.

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