2021 Investment Trends and Tips from the Experts

Content Producer · 14 January 2021
Whether you’re looking to invest in shares, property, super, crypto or alternative investments, these experts have you covered sharing their outlook for the year ahead.

2020 was an unexpected year for most, but one thing that has remained consistent is the appetite of investors for practical investment knowledge. In this guide, we’ve gone directly to the experts to see what they are saying about 2021 and the key tips you should be considering when investing in your area of interest. In three easy to follow steps, these experts outline where they will be putting their focus this New Year, and how you might consider this in your own investment vehicle.

Skip to your investment area of interest:

No matter how you invest, it’s important to understand why you invest.

Investing in Australian Shares in 2021

Knowing how expert investors are approaching their own portfolio may give you a useful insight into strategies and approaches to research. It may help you identify opportunities, or help you decide where to start.

Analyst at InvestSmart, Nathan Bell has made a career out of analysing stocks and deciphering where to find value. He discovered value investing during his time as an accountant and has an eye for knowing where to find opportunities for strong performance as he shares in his insights below.

(1) Think small. Small-cap stocks haven’t performed as well as larger stocks that people are more familiar with and feel safer owning, particularly during challenging periods like the past year due to the panic surrounding COVID-19. Given PERs have increased way beyond historical norms to 30-60x for the best large businesses, small-cap stocks have a lot of catching up to do.

(2) Think value. The valuations of so-called ‘value stocks‘ are trading at a record discount compared to ‘growth stocks’. The potential returns from the most popular growth stocks over the next five years could be very measly at best. In contrast, some of the best resources companies are trading at record lows compared to the current market leaders.

(3) Think unpopular. While it pays to own quality over the long term, there are occasions when the reward for buying what’s unpopular is extraordinarily high. We are currently in one of those rare periods, as we’ve discussed above with examples in small companies and the resources industry. You won’t get much support from your friends by buying unpopular stocks, but it could make for an unusually profitable Christmas next year as the global economy re-opens from the COVID-induced hibernation.

If you’re looking to get started in trading Australia shares, you’ll need to open an online share trading account which you can compare below. In this article, we look at online share trading accounts with the lowest fees.

About Nathan Bell

Nathan Bell

Nathan Bell is an analyst at InvestSmart. Nathan discovered value investing after spending nine years as an accountant, including five at Deutsche Bank that ended in 2006, and has been with Intelligent Investor ever since. He is a CFA charter holder and his experience has guided our strong performance since 2011.


Investing in International Shares in 2021

Looking further abroad can deliver a world of opportunity as eToro’s Managing Director Robert Francis explores.

Many Australian investors choose to invest in global stocks as part of their wealth-building journeys because there is a perception that there is more opportunity to be unlocked in global markets. These markets generally have more participants, and stocks often have higher market caps, meaning there is potentially more return to be generated. Investing internationally also allows Aussies to invest in household names that may not be listed in Australia.

Multi-asset investment platforms offer investors the opportunity to access stocks from around the globe. Everyday Aussies can invest in fractions of stocks from big-name tech giants such as Tesla, Amazon, Facebook and Google.

Why would investors consider only investing in Australian stocks?

There is currently a high global demand for Australia’s energy, minerals and food stocks, which means that the companies who supply these products and commodities are valuable. Some investors may choose to invest their money closer to home and back companies that directly participate in the Australian economy.

Australian shares have historically generated great long-term returns, compared to other investment choices. For example, over the last 94 years, Australian shares have delivered annualised returns of 10.7% on average, beating returns in property, bonds and cash.

Why would investors consider only investing in international stocks?

International stocks can act as an important source of diversification, improving a total portfolio’s expected risk-return profile, versus a portfolio that includes only Australian stocks. This benefit comes from holding stocks in a variety of countries, each reacting differently to market and economic conditions.

Investing in international stocks presents the benefit of accessing global industry leaders across an array of sectors such as Microsoft, Apple and Johnson & Johnson.

International investing can also provide access to industries and countries that are performing more strongly than Australia and its major industries (in the short and long term).

What are your three recommendations for investors looking for a mix of both?

  1. Diversify your portfolio to give it good balance, as well as limit your risk of market volatility if a country faces any extreme economic downfall.
  2. Do your research and keep a finger on the pulse of the news cycle. This will help you to make better-informed decisions in terms of stock and industry performance.
  3. Finally, invest in what you know and where your passions lie. By doing so, you are more likely to understand how they best operate. For example, if you love tech, you may decide you want to buy stocks in global companies such as Apple or Microsoft, or even local leaders such as Afterpay or Redbubble. Or, if fashion is more your thing, then you might want to consider global stocks such as ASOS or H&M, and more locally with Accent Group or Lovisa.

You can also capture these themes, sectors and interests by investing in Exchange Traded Funds (ETFs).

The table below displays some of the International Broad Based ETFs available on our database with the highest three-year returns (sorted highest to lowest by three-year returns and then alphabetically by provider name). Use Canstar’s ETF comparison selector to view a wider range of products. Canstar may earn a fee for referrals.

Robert Francis About Robert Francis

Robert Francis is the Australian Managing Director of multi-asset investing platform eToro. Before Robert Francis joined the world’s largest multi-asset investment platform eToro in June 2017, he was leading operations for the Exchange Traded Options desk and the International Trading Desk. Heading up eToro in Sydney, Australia, Robert is an expert in stock markets with over 13 years of experience and senior positions at CommSec and TD Waterhouse.


Investing in Property in 2021

Now that our real estate markets are working their way out of the effects of the Coronavirus Pandemic and out of Australia’s first recession in 30 years, many investors are asking what the outlook of the 2021 property market will entail. Property investment advisor Michael Yardney shares his three areas of focus for investors to make the most of property in the New Year.

1. Property Investment is a process – not an event

Becoming a successful property investor involves more than just doing some research on the internet, inspecting a few properties and buying one.

Remember searching for a property is very different from researching the property markets

Successful investors have a long-term strategy to grow their wealth and use the correct asset protection and finance structures as well as insurances to mitigate their risks. And they get a good team around them to level the playing field.

They know who to ask for advice and understand the difference between salespeople who represent the seller and independent advice they’d get from a property strategist or buyer’s agent

2. Location will do 80% of the heavy lifting

Most of your property’s growth and performance will come from location. Some locations will outperform others by 50% to 100% over a decade with regard to capital growth and rental growth.

A lot has to do with their demographics – so look for locations that are gentrifying and hunt for lifestyle locations and destination locations where aspirational and affluent people want to live as these will outperform with regards to capital growth, because the locals will have more disposable income and be prepared to, and can afford to pay to live in these suburbs.

3. Timing the property market is just too hard.

Even the experts can’t pick the top and the bottom of the property market, so don’t even try. Look at all those forecasts made earlier this year that have proven so wrong.

Having said that I believe we have passed the bottom of this property cycle in all our capital cities and when you look back next year you’ll see that the mid-October was when our market turned around. Market timing isn’t really important to them.

On the other hand, do others do poorly in good times and even worse in bad times? Market timing seems to have very little effect on them either.
Interesting isn’t it?

Lowest interest rates for 1-year fixed home loans

The comparison table below displays some of the 1 year fixed rate investment home loan products on Canstar’s database with links to lenders’ websites available for a loan amount of $350,000 at 80% LVR in NSW, and available for Principal and Interest repayments. The results are sorted by ‘current rate’ (lowest to highest), then by provider name (alphabetically).

*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.

Lowest interest rates for 3-year fixed home loans

The comparison table below displays some of the 3 year fixed rate investment home loan products on Canstar’s database with links to lenders’ websites available for a loan amount of $350,000 at 80% LVR in NSW, and available for Principal and Interest repayments. The results are sorted by ‘current rate’ (lowest to highest), then by provider name (alphabetically).

*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.

Lowest interest rates for 5-year fixed home loans

The comparison tables below displays some of the 5 year fixed rate investment home loan products on Canstar’s database with links to lenders’ websites available for a loan amount of $350,000 at 80% LVR in NSW, and available for Principal and Interest repayments. The results are sorted by ‘current rate’ (lowest to highest), then by provider name (alphabetically).

*Comparison rate based on loan amount of $150,000. Read the Comparison Rate Warning.


About Michael Yardney 

Michael Yardney

Michael Yardney is a director of Metropole Property Strategists. He is a best-selling author, host of The Michael Yardney Podcast, one of Australia’s leading experts in wealth creation through property and writes the Property Update blog. He’s been voted Australia’s leading property investment adviser and one of Australia’s 50 most influential Thought Leaders. His opinions are regularly featured in the media.


Investing in Superannuation in 2021

Beyond the usual start-of-year reminders to consolidate your super accounts and ensure you are being paid your full super entitlements (both very important!), there are considerable benefits from looking more closely at how your super is performing and what you can be doing to make the most of it.
As a long-term investment, small improvements early on to how you manage your super can make a big difference at retirement.

1. Make sure you are with a fund that delivers high net returns

It seems simple but in 2019 the Productivity Commission found about 2 million Australians were stuck in underperforming funds.
Underperformance can cost members up to $500,000 in savings when they retire, according to the Productivity Commission. This could mean you need to work years longer to make up the shortfall.

Likewise, the fees you pay ultimately come at the expense of your retirement balance. Paying high fees could cost you about $100,000 by retirement, according to the Productivity Commission.
Look for a fund with high net returns. Net returns are the investment returns minus all fees and costs – it’s what ends up in your account so it is really all that matters.

Compare your existing super fund with others in the market to make sure it is meeting your needs. Fees and investment performance are important factors to consider. Remember long terms returns is what matters. Compare funds over at least 5 years or more. High-quality funds will often have a strong performance track record over multiple timeframes reflecting different market conditions.

By the time you reach retirement, your super will likely be one of the biggest assets you have. It is important to extract its full benefits over the longest possible period.
The longer you delay checking if you are with a good fund delivering high net returns, the longer you run the risk of losing out on those all-important early compounding returns.

If you’re comparing Superannuation funds, the comparison table below displays some of the products currently available on Canstar’s database for Australians aged 30-39 with a balance of up to $55,000, sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Use Canstar’s superannuation comparison selector to view a wider range of super funds.