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However, many of the stocks that outperformed the
S&P 500 last year have underperformed the market so far this year, as rising vaccination rates have shifted the spotlight and investors money toward reopening plays. That shift consists of lots of moving parts. Here are the five main trends investors should follow.
Image source: Getty Images.
1. Rising bond yields
Yields on U.S. Treasury notes hit historic lows last year during the initial stages of the COVID-19 crisis. But they ve steadily risen since then, as expectations for inflation in an accelerating economy sparked a sell-off in bonds.
That might sound confusing, but the mechanics are fairly simple. Investors generally sell more bonds when they expect inflation, as it erodes the value of their principal and fixed interest payments.
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