Market speculation is a tricky thing to manage. It seems every other day someone has a hot new tip that says the market is going this way or that. People panic sell or buy up as much as they can be based on the smallest shred of information.
So we are always hesitant to present any of these market rumors to our readers. But sometimes the rumors we hear are a lot less specific and more general. And sometimes these rumors are worth talking about purely from a speculative angle. So today we want to look at a popular rumor we have heard time and time again. That 2021 is going to see a market boom, unlike anything we have seen in a long time. We are going to break down a few key elements of these rumors to help you understand, in simple terms, why economists predict this.
The Election
The biggest factor we can see in these estimates is the outcome of the 2020 election. The USA has been through a troubling time. With the world economies facing an unprecedented time this past year, and with political tensions at an all-time high, many see the results of this election as a sign that America can begin healing.
This has nothing to do with political bias. It is not unheard of for the market to strengthen when a new president is sworn in. Countries anticipate new trade deals. Different sectors receive new funding. As everything changes, people tend to look at it positively and the market reflects that.
Normally this change is minor. Nothing too crazy. But 2020 may be one of the most nail-biting elections in America’s history. The impact of this election is going to send waves through the economy for some time yet. This could be one of the main reasons they are predicting a market boom.
Education
Studies have shown that educational quality in relation to the world of business has been slowly increasing over the past few decades. But in the last few years, we have seen a surge in people taking their destiny into their own hands and starting up a small business or classifying themselves as entrepreneurs.
This increase in business knowledge means there are more and more companies being created. More supply on the market. And more money being circulated at the local and national level. As people are more clued up in the business world, we will see the emergence of more companies offering leads to businesses. The best at generating leads in multiple industries, Exclusive Leads Agency spoke to us about this phenomenon. They said it is not unheard of to see a market boom as people tend to move towards independent work.
Brexit
Brexit was the referendum held in Great Britain in 2016 where they decided they would leave the European Union. And while this is going to have a huge impact on the United Kingdom itself, it also has massive repercussions for the rest of the world.
Particularly the global marketplace. England is a powerful and rich nation. One of the biggest players on the world stage. But until now their trading regulations and laws have been slightly controlled by the EU. As part of the agreement of any joining nation. It also meant that the United Kingdom had to prioritize trading with other EU nations before nations not included.
America and the UK have always had a special relationship. And this has always been reflected in their trade agreements and willingness to share their information. But now the UK has finally left the EU, the market predicts there will be an increase in trade between the USA and the UK. While we are skeptical about this, due to the shifting political scene both here and over there, there is no doubt that Brexit is playing a significant factor in these rumors.
Bouncing Back
We have been in a recession for some years now. And it is easy to view a recession as this big scary, country dooming thing. But the truth is recessions are an often natural occurrence in any economy. Due to factors outside our control, such as a pandemic. And whenever there is a recession, there are always rumors circulating that the next year will see them bounce back.
It is very rare for a recession to never end. And even rarer for it to doom a country. In America, we often see a bounce back sooner or later. So that could be where these rumors are coming from. This idea that we are about to head into the bounce back. Taking into account all the other factors we have mentioned so far, it is no surprise that many people seem to think this.
