January signals the start of a new trading year, and investors familiar with the stock market may be wondering which sector has the best odds of gaining value during the month. Recent data regarding the Nasdaq shows that the stock exchange may have a head start in 2021, and its performance may be the first benchmark investors will use to predict market movement in the new year.
At the end of 2020, the Nasdaq managed to gain 42.9% on the year, while the other two major markets, the S&P 500 and Dow Jones Industrial Averages, each reported a gain of 16.3% and 7.3%, respectively. Those following the stock market know that the Nasdaq is tech-heavy and is often the go-to choice when it comes to internet-based stocks and companies, something that has become increasingly popular with the rise of the digital age.
Interest in the Nasdaq also increased in 2020 as several tech stocks, such as Tesla and Apple, became major market movers. With tech stocks expected to remain key drivers of the market in 2021, the Nasdaq is a logical place for investors to place their bets.
Additionally, analysts note that the Nasdaq is much less affected by political events than other markets. This means that the focus in the Nasdaq will remain more on the performance of its stocks, rather than any economic or political considerations.
Given the healthy outlook of the Nasdaq entering 2021, the stock market may be one of the best bets for both small and large investors who are looking for performance gains. With tech stocks continuing to lead the charge, the Nasdaq looks poised to remain one of the top places to invest in 2021.