Being a bit contrarian helps, Patil said, adding that it’s better for investors not to take too large a call on sitting on cash. They should also focus on a bottom-up portfolio so they can go through both up and down cycles, he said.
SooHai Lim, head of Asia Equities ex-China at Barings, said the speedy market recovery proved the soundness of the old saying “Don’t fight the Fed.”
That said, some fund managers warned that investors should not take swift central banks support as guaranteed.
“It was a flip of a coin where it went from there and whether they’d stepped in early enough,” said John Roe, head of multi-asset funds at Legal & General Investment Management in London. “The downside could have been unprecedented.”
This year’s dizzying rally in tech stocks gave investors an opportunity of a lifetime. Anyone who missed out on this theme that benefited greatly from stay-at-home and digitization trends in the pandemic would most likely find their portfolios lagging benchmarks. The top ten U.S. companies that have contributed the most gains to the S&P 500 Index this year are all technology-related stocks, ranging from cloud-computing pioneer Amazon.com Inc to chip maker NVIDIA Corp.
Even with a short pause in November when positive trial results from a Covid-19 vaccine spurred a rotation into lagging cyclical shares, technology has ended as the top-performing sector in Asia and Europe. Adherents of the value strategy saw multiple false starts during the year, as investors bet that the group of shares, defined by cheapness and mostly comprising names sensitive to economic cycles, would finally have their day. They were disappointed.