Year of the Ox: A year of renewal

2021 is the Year of the Metal Ox. In China, the Ox is considered a diligent, honest and strong animal that is associated with good harvests and fertility. The steady and patient Ox would have been first in the Chinese zodiac, if not for the rat which hitched a ride and subsequently won the race by jumping off before the Ox could cross the finish line.

The rat might be the first to cross, but the Year of the Rat ranks as one of the poorest years for stock market returns among the 12 zodiac animals in the Chinese calendar, with an average return of 3.3 per cent. In fact, one of the worst (Rat) years happened during the Global Financial Crisis in 2008, with the S&P 500 declining 39 per cent.

Although the S&P 500 finished 2020 (Year of the Metal Rat) with a decent gain of 16.2 per cent, the gains were largely centred on the five biggest stocks of the index, namely Facebook, Apple, Amazon, Microsoft and Google (FAAMG). If one excludes the FAAMGs, the S&P500 posted a modest return of 6.5 per cent.