COVID-19 vaccines are rolling out, consumers are cashed up and most market analysts are bullish for 2021.
But after a shocking 2020, the world remains a very uncertain place.
So two professional investors were asked this week at a GSFM briefing what would wipe the smiles off their faces.
Here's what they said:
Image source: Getty Images
Big risk #1: China
Tribeca Investment Partners portfolio manager Jun Bei Liu identified the rising power of China as a potential danger to investors.
"It's created political tension over the last 12 months. China's growing very rapidly. Its economy may well exceed the size of the US within sight, very quickly," she said.
"You might see more conflicts, whether it's trade or something else."
Big risk #2: big tech
Liu also called out the public and government scrutiny of giant technology companies as a risk for stock markets.
"We also have increased pressure on the market power of some of the tech players," she said.
"You will see increased scrutiny around the western world… There will be more regulation."
Some current examples are anti-trust and news revenue arguments against Alphabet Inc (NASDAQ: GOOGL) and Facebook Inc (NASDAQ: FB). And even the Chinese government's scrutiny of Alibaba Group Holding Ltd (NYSE: BABA).
There will also be a segregation of tech infrastructure between the US and China for security, political and economic reasons, according to Liu.
She feared for the worst if either China or tech regulation dented market confidence.
"What does that mean for the equity market? It means risk. It means when we start having these uncertainties, markets just aren't priced in for it.
"If any of those [risks] flare up, we will see equity markets sold off. Investors will try to re-price on what it means."
Big risk #3: inequality
Munro Partners chief investment officer Nick Griffin's biggest concern for the market was the growing gap between the wealthy and the poor.
After all, that very trend prompted the rise of populism in recent years – as seen in the US election of Donald Trump and the UK's vote for Brexit.
And last year only exacerbated the situation.
"I know the pandemic was a terrible thing, and it has created these winners and losers. So the inequality that was in the market before gets worse," said Griffin.
"There will be a reckoning at some point in the future. There has to be, because you can't have this level of inequality occurring in the world… Over the long run it's probably not sustainable."
Griffin said that climate change is the biggest investment opportunity since the rise of the internet.
"We conservatively estimate this will cost US$21 trillion (AU$27 trillion) over the next 30 years… This is going to be the biggest S curve of my investment lifetime."
But this type of change leaves citizens behind who are only skilled to work in old world industries, heightening the very tension that he identified.
Griffin did temper his view about the timing though, saying he thought the "reckoning" would not take place "in the next 12 months".
