The current year has been among the most challenging for the global economy. The novel coronavirus pandemic triggered a global recession.
According to the International Monetary Fund, the global GDP is expected to contract by 4.4% for 2020.
As the chart below shows, the contraction is likely to be sharper for advanced economies as compared to emerging economies.
However, for 2021, the global GDP growth is expected at 5.4%. Therefore, a strong economic bounce back is likely.
At the same time, it's worth noting that the Federal Reserve has pledged to keep interest rates near-zero levels through 2023. It implies that easy money policies will continue with GDP growth.
This is a clear recipe for higher inflation and I expect gold and silver to perform well even in 2021. I also expect Bitcoin to do well as fiat money loses value due to inflation.
In terms of sectors, the energy sector can bounce back in the coming year. As demand for oil increase, the price of oil will also trend higher. Investing in quality oil and gas stocks is a good idea.
Another sector that has been an under-performer in 2020 is the banking sector. If growth gains traction in 2021, I expect the banking sector to do well.