The year so far has certainly been unpredictable and memorable.
Moving aside from the obvious headlines regarding Coronavirus statistics, our focus has been on the impact to financial markets and our clients, their pensions and investments.
As the crisis developed there were many pundits arguing we would experience a swift economic recovery in the shape of a “V” as the virus was expected to have a short-term impact. In other words, a dramatic correction followed by an impressive bounce back.
Reality started to hit home and financial analysts changed their predictions from a “V” to a “U” shape. The depth of the crisis and impact on the global economies would see a longer drawn out period before the recovery later in the year, or even next year. From an economic perspective this is certainly true and many industries have repositioned themselves with 2021 being their focus.
However, partly due to economic stimulus, the recovery in financial markets was actually much more of a “V” shape. This is very encouraging as it showed that stock market investors looked beyond the negativity and focused more on the basic fundamentals which showed many companies continue to be busy and are looking forward to new opportunities.
We do not want to play down the devastating impact on industries like travel and hospitality but it is reassuring how well many businesses are doing whilst readjusting their company working practices to become more productive.
We would argue the convalescence has only just started but it is good to be positive. The coming few months will almost certainly see financial markets being volatile and reacting to Coronavirus, the end of furloughing and financial assistance, as well as the US election and Brexit.
However, as we have seen already investments do generally pull through and although the “V” recovery may suffer further setbacks, it will again bounce back given time and become a “W” shape.
As we look ahead, we feel there are many reasons for favourable investing conditions to continue, although we do obviously still need to take into account the wider global political situation.
In short be patient and rely upon your long-term investment strategy. If you have any concerns get in touch.
Remember, we are more than happy to chat with our clients and answer any queries.
Our team is always available to help. Whether it is a review driven by worries about financial markets or simply a change in your situation or priorities, please contact us.