Kitco News has launched its 2021 Outlook, which offers the most comprehensive coverage of precious metals markets in the new year. Trillions of dollars were pumped into financial markets in 2020 and that won’t come without consequences. Economists expect that investors will be Bracing For Inflation in 2021.
(Kitco News) – Kevin O’Leary, chairman of O’Shares ETFs and star of Shark Tank, said that the digitization of America is here to stay, even if the economy opens up again.
Some sectors will continue to outperform others, O’Leary said.
“I think we [have recovered] in 80% of the cases. There are some sectors that are disadvantaged and will remain so, and also there has been some permanent change in consumer preferences and how they buy,” he said.
Business travel, hospitality, and entertainment will continue to be challenged in 2021.
O’Leary has sold off his commercial real estate holdings to redeploy capital into the technology, healthcare, and consumer service sectors, adding that work from home stocks are now really “work from anywhere stocks.”
“For the first time in decades, I’ve reduced my exposure to commercial real estate from 31% down to 8%, which has freed up a tremendous amount of capital that I have to redeploy,” he said.
Monetary policy is expected to remain expansionary in 2021, O’Leary said.
“The environment for investors to consider for the next 18 months is a very accommodative Fed with interest rates remaining at basically zero, and yet for the first time in my investment life, I have companies growing at 20%, 30%, 40% annually and I get to invest in them when interest rates are zero,” he said
On gold, O’Leary sees the metal as a hedge against inflation, and contrary to what some analysts think, it will not be replaced by bitcoin anytime soon.
“Gold has traditionally been a hedge against inflation. If you ever wanted to hedge against inflation, you’d want it now,” he said. “Some people have suggested that bitcoin could be a replacement for that. I am not in that camp for a whole host of reasons. I haven’t found the inverse correlation yet that people tell me bitcoin has to the markets, if you go look at the March corrections, bitcoin corrected as much, if not more than the market did, so I’m not convinced yet that it’s a replacement for gold.”