Investing legend Byron Wien says the S&P 500 will hit 4,500 in 2021-but warns of a 20% correction in the first half of the year

• Byron Wien released his 36th annual "Ten Surprises" list on Monday, where he forecasts financial, economic, and political events that he believes will have a better than 50% chance of happening.
• The vice chairman of Blackstone Group Inc's private wealth solutions business is forecasting the S&P 500 will tumble almost 20% in the first half of 2021 but then climb to 4,500.
• He also predicts that unemployment will fall to 5%, large-cap technology stocks will lag, and cryptocurrencies will "gain more respect during the year."
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Byron Wien is forecasting the S&P 500 will tumble almost 20% in the first half of 2021 but then climb to 4,500, a 21% upside from current levels.

The vice chairman of Blackstone Group Inc's private wealth solutions business released his 36th annual "Ten Surprises" list on Monday. Joe Zidle, the group's chief investment strategist, co-authored the list.

Wien defines a "surprise" as an event that the average investor would only assign a one out of three chance of taking place but which he believes will have a better than 50% chance of happening.

On the markets front, Wien predicts that the S&P 500 will correct almost 20% in the first half of 2021, but rise to 4,500 later in the year. At the start of 2020, he predicted the benchmark index would pass 3,500 at some point.

Read more:A Refinitiv research chief outlines 6 key investing themes that will drive markets in 2021 - and explains how you can capitalize on each within your portfolio

Stocks beyond health care and technology will participate in the rise in prices as the stock market broadens out, he added. Wien sees cyclical stocks leading defensive stocks and small-cap stocks beating large-cap stocks. He added that large cap technology stocks will be laggards for the year.

The investor also predicts the post-vaccine economy will be strong and momentum will develop on the back of pent-up demand, while stocks in depressed industries like hospitality and airlines will rally. The unemployment rate will fall to 5% and 2021 will mark the beginning of the "longest economic cycle in history, surpassing the cycle that lasted from 2010 to 2020."

Wien added that inflation will increase modestly, and as a result, gold will rally and cryptocurrencies will "gain more respect during the year."