Market Update - "Looking ahead beyond lockdown"



Moving on from 2020!


There is no doubt that as we move into 2021, we will look back at 2020 and still find it hard to believe how much has changed due to the Covid-19 pandemic. The impact on our lives, our work and the way it has shaped the global markets and economies on a scale never seen before in modern times.

Governments and central banks have been called upon to provide unprecedented financial support to deal with the economic fallout. Alongside this, there has been the strain on the healthcare services and political events such as the US election and Brexit which have dominated the latter part of the year.


With the roll out of various vaccines now in progress, there is renewed hope that we will be able to return to some normality later this year and be able to start to rebuild our lives and the economy. We have also finally seen the conclusion of the US election and a long-awaited UK trade-deal with the EU, so these should help towards some degree of stability.

Investor confidence?

 

However, although the markets have seen some recovery since the low point of global equities in March 2020, it would be fair to say that markets do remain uncertain and the path ahead is going to continue to be difficult to navigate.


We are seeing some signs that investor confidence has started to moderate with the more infectious Covid-19 virus strain taking hold across the world and the renewed social restrictions that will inevitably have a knock-on effect on various economic indicators.


The markets are therefore expected to have times of increased volatility over the coming months and overall forecasts for global growth for 2021 have been lowered by many analysts.



It remains that the hidden costs of lockdown on all of us as well as the economy will not truly be known for some time yet and Governments continue to find themselves in a difficult position whilst they try to balance public health against the financial well-being of the country.   


'Normal Life'?


One of the positive things we have seen is that the pandemic has made many of us re-examine our lifestyles, working practices and appreciate more the value of ‘normal life’. It has also raised issues of inequality and a renewed focus on the need to create a fairer society.


Companies & ESG - environmental, social & governance


Many companies have come under intense scrutiny to look at their environmental, social and governance* policies. This will no doubt impact how consumers and investors view these companies in the future and the need for them to behave more responsibly, which also makes good business sense.


This has been further driven by investors looking more carefully at where they invest their money and an increased demand for funds that hold assets meeting these *ESG criteria. We see this as a growth market and should produce more sustainable returns in the future, which ultimately will hopefully encourage the re-building of a greener, fairer and more sustainable world for all of us.


Staying optimistic


At Statehouse we remain optimistic and whilst there are still going to be difficult times ahead during 2021, there are also significant opportunities for well informed investors and some resulting factors post-pandemic that will drive positive changes to the way we live, work and how we manage our financial well-being.