2020 has been a pivotal year in terms of the investment landscape. Attendees of our December webinar heard Gareth Lewis outline the main events which affected the investment landscape over the course of the year, which triggered both the fastest bear market in history and a record-breaking recovery.
Gareth believes that 2020 has caused a significant shift in the investment landscape which will impact all investors and require all of us to adjust our financial planning accordingly.
Here are the six main ways the investment landscape has changed in 2020.
2020: six ways the investment landscape changed
1. Social and economic issues have taken centre stage – While many of the social and economic problems we face have been around for a while, they now look likely to take centre stage in the policy debate in the long term, having been brought to the fore by the Covid-19 pandemic.
2. Wealth distribution has been brought into focus – the short term policies required of governments and central banks to backstop capital markets is accelerating the debate about wealth distribution and the social division between those who own assets and those who do not.
3. Government accountability has increased – The decision to lockdown whole economies will make politicians culpable for the fallout of rising unemployment and small business default.
4. The focus is switching from Wall Street to Main Street – as a result of the Biden presidential election victory and his appointment of Janet Yellen, as Treasury Secretary (pending Senate approval). She ‘has shown a deep concern that today’s economy is no longer helping the bottom half of the income ladder achieve the American Dream’ and is considered to be a champion of the middle and lower classes.
5. The scene has been set for increased fiscal spending and rising inflation – expect a sustained increase in fiscal spending, greater tolerance for above-target inflation and more aggressive corporate and personal tax policies as politicians aim to redistribute the economic benefits of the post-GFC period.
6. The need for a shift in investment strategy – as inflation rises, debt burdens will bite and cash flow will become constrained.
Clearly these major shifts will impact the investment environment in 2021 as well as your ongoing financial planning strategy. Take a look at how Gareth sees the landscape evolving over the course of the next 12 months here.
And why not set the scene for a financially rewarding 2021 by booking a review of your situation with one of our highly qualified financial planners? They can help you take a look at your financial planning goals in the context of the evolving investment landscape and make any changes required to your investments to make sure you are on track to achieve them.
Get in touch with your adviser for a January review, or if you don’t already have an adviser, contact us and let us put you in touch with a consultant in one of our offices across Asia.