Left field thoughts with the expectation that we will be right with at least one
Making predictions for markets over short time frames is a fool’s game, yet every year we all feel obliged to put our thoughts forward. Looking back at 2020, whilst few expected a bumper year for markets, most suggested that we were entering a gentle slowdown with returns muted but with low volatility.
Of course, no one could have predicted a pandemic, and if they had, not many sane individuals would have believed them. Perhaps just as surprising would have been the market reaction – with swathes of the world in lockdown, global equities have returned to their pre pandemic levels.
Sticking to the bland predictions
Nostradamus was as prolific as any market commentator with his predictions, and a quick glance at one of his thoughts for 2021 is rather terrifying: a zombie apocalypse caused by a virus…
Whilst we will not go as far as Nostradamus, rather than sticking to the bland predictions, we have chosen to suggest some left field thoughts with the expectation that we will be right on at least one!
So, aside from the clear fact that green is the new black (ESG) and that the compliance department will be larger than it was in 2020, we humbly “predict”:
- FTSE 100 hits 8000. With more vaccines than cases, social distancing becomes a distant memory and all that pent-up demand is released.
- Oil hits $100. As above, after a year of staring at the same four walls, travel demand explodes.
- Boris Johnson is still Prime Minister. Despite the best efforts of Covid, Brexit and his own party, Boris survives another year.
- Brexit is a complete success. Our fishing rights become the envy of the world; day traders swap their puts and calls for boats and nets.
- Donald Trump announces his campaign for President in 2024, declaring voting will not be required as he has already won.
Significant swings in markets
Cleary these predictions are a little tongue in cheek. From our perspective, it is clear that next year will continue to see significant swings in markets, once again, driven by factors outside of the market’s control. Although anyone who has been to the office since March would tell you that the streets feel eerily like the aftermath of a zombie movie – perhaps Nostradamus wasn’t so far off the mark?
CONTINUING TO SHAKE THE MAGIC MONEY TREE
Having said this and being wary of straying into the world of predictions, we do expect 2021 to be positive for risk assets as central banks continue to shake the magic money tree. Whatever wealth means to you – now and in the future – we can help you achieve your goals for it in every area of your life. To discuss how Kingwood can help you, please contact us.
Paul Surguy
Head of Investment Management