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Another positive year for the stock markets is ahead of us

Jan. 20, 2021

Another positive year for the stock markets is ahead of us simply because there are no alternatives. More and more people are inclined to turn to riskier assets and this will lead to a growing interest in stocks. This was stated by Dragomir Velikov, Chief Investment Officer of “Compass Invest”, in the broadcast "In Development" hosted by Veronika Denizova.

"2020 was a very volatile year, and central banks reacted proactively and even managed to stabilize the market and prevent a major economic crisis."

According to Velikov, some of the countries have already reached their pre-crisis levels of economic indicators.

"The fiscal stimulus of governments and central banks were one of the most important things that happened last year. They led to an increase in all secure assets and an increase in interest in riskier assets. Thus, more and more investors began to enter the market."

"There are a lot of discussions about the fact rich keep getting richer. And one of the reasons for this trend is investing in stocks and businesses", explained the guest.

"People need to invest their funds and not only to rely on savings products.”

According to Dragomir Velikov, among the most profitable assets of 2021 and 2022 will be those related to fintech, cloud services and large databases.

According to the Chief Investment Officer of “Compass Invest”, commodities have always been a good hedge against inflation, but the question is when are we going to see inflation.

"In any case, commodities have a place in every portfolio", he added.

Velikov stressed that the factors that will affect trade this year are the same from 2020, given that there are no expected changes in the central banks policies, the fiscal stimulus will continue.

"Current policies will support the search for high-yielding assets."

Dragomir Velikov also commented that since the establishment of “Compass Invest”, the goal is to be a long-term investor.

"We invest in companies that are growing faster than the world average. The pandemic was a catalyst that helped us. We saw the real benefits of the companies we had invested in before. COVID-19 helped see what our future would look like technologically over the next few years. And because we are positioned in this sector, there was a positive element in the demand for this type of service. The topics and global trends that we are trying to identify are demographic development, sustainable growth and technological development", says Velikov.

The whole interview you can watch in the video.