There’s no doubt that 2020 has been a tumultuous and challenging year for individuals, businesses and the global economy, as well as a rollercoaster ride for investors. When Covid hit in March, we witnessed the fastest bear market in history only to see markets bounce back in a remarkable recovery. A US presidential election and the arrival of a vaccine are additional factors which have made this a pivotal year in terms of the investment landscape.
Earlier this month Infinity’s Managing Director, Trevor Keidan, hosted our final webinar of the year in which Gareth Lewis, Managing Director of Investment Strategy at Tilney highlighted the significant changes that have occurred in the investment landscape in 2020 and looked ahead to what might be in store in 2021 and beyond.
This is the first in a series of three blog posts in which we summarise what Gareth had to say. First up: a review of 2020’s main events.
2020: the main events in the markets
March 11th 2020: the fastest bear market in history
- The magnitude of the fall was not exceptional compared to previous falls but the speed was
- Tilney believe that the falls cannot be blamed solely on the virus but that marketing positioning and policy response also played a part
End of March 2020: turning point for equity markets
- Markets began to rise again due to lockdowns and monetary stimulus
Since March 2020: the road to recovery
- Phases one and two of a three stage recovery – phase three is still to come
- Phase one: panic selling by investors
- Phase two: driven by a confidence that policies introduced by governments are sufficient to deal with threats posed to the global economy. This has fuelled one of the fastest recoveries in asset prices in history. The chart shows performance for the first half of 2020. Stocks have seen more robust recovery since July
November 2020: US presidential election
It is thought that the election of Biden as the new US president will herald a new era in US politics which will bring about significant change. Biden’s appointment of Janet Yellen as Treasury Secretary is believed to be significant. She is described as a champion of the average working man and woman.
November 2020: the announcement of effective vaccines against Covid-19
The markets, predictably, responded positively to the announcement, and subsequent rollout (in the UK at least) of an effective vaccine against Covid-19. This has increased the prospect of an economic recovery in 2021.
With all the changes that 2020 has brought, it’s time to consider whether your financial plan is still fit for purpose. Considering how the events outlined above have had a significant impact on the investment landscape (read more about that here), it might be time to rebalance your portfolio.
If you’d like help with reviewing your financial plan, why not give us a call to arrange a meeting with one of our highly qualified financial advisers and get your 2021 off to the best possible start?
A leading provider of expat financial services and wealth management services across Asia.