Well 2021 has certainly arrived with a bang!
Over in the United States we received reports of armed protestors apparently being encouraged by their President.
In India we hear about huge swathes of the Himalayas being taken by China through surprise military force.
And here we are, all locked up for our terrible behaviour in spreading a virus!
‘What on earth can Darren possibly find to be positive about today?’ I hear you cry!
It certainly is a ridiculously tough time for all of us. The older and more physically vulnerable are fed up with sitting around waiting for better news. The youngsters are desperately worried about their education and future’s and those in the middle find themselves frantically clinging on to their jobs, unsure who to believe and how to react.
The media are now in full devastatingly negative mode, crushing any hope in their readers with highly politicized and misleading nonsense as click bait. They really should be ashamed.
Let’s consider some facts that they don’t want to tell us about for a minute.
The BBC ‘heat map’ of Covid cases released on Wednesday this week showed a notable improvement in the hot spots across Wales. Whilst everywhere is still running at around 50+ cases per 100,000 people, the 150+ hotspots are diminishing fast. The lockdown is definitely achieving its objective in reducing infection rates and whilst we are not yet ‘out of the woods’ I can see the edge of the treeline.
The media told us that Brexit was going to be an utter disaster with crashing markets, lorry jams and no fresh fruit or veg in sight. At the point of writing, the FTSE 100 has shot up some 5.5% from December the 21st, goods are flowing into the UK and I am merrily munching my way through a punnet of rather good blueberries.
Summer holiday sales are growing strongly with the National Express summer schedule reporting a very large increase in bookings from the retired generation as they look forward to receiving their vaccines.
In the United States, we can see a stimulus package coming together for around 1.9 trillion dollars that will see a huge vaccine programme and assistance cheques reaching the hardest hit in society.
Indeed, Goldman Sachs have forecasted a phenomenal 14% increase again in the S&P 500 index for 2021! This is based on better recovery data in the U.S. and reflects the robustness of many U.S. businesses who will get their time to shine once the lockdowns lift.
The Asian markets also like this projection and seem to be buying strongly into the sentiment that the U.S. will lead the way yet again in 2021. Emerging markets are dependent upon U.S. success and we have noticed funds connected to this story enjoying a fantastic start to the year.
Just as an example, we can see today that the Invesco Asian fund is up by around 9.26% over one month and the JPM Emerging Markets fund is also up by around 7.34% over the same period. This is some recovery and is feeding through to our clients’ Mainstream portfolios.
And let’s not forget old Britain! Our decision to increase UK Equity funds in early December is now looking a good one for our clients holding level 1-3 portfolios. The UK has long been under loved, but the tide is turning and suddenly Cool Britannia may be back on the cards.
In amongst all of this positive news, there is one issue that continues to worry me and that is the behaviour of China. Their constant refusal to allow the rest of the world to investigate the starting point of this virus, aggression to other countries such as India, Taiwan and Hong Kong and their treatment of human lives is not going to go unreported for ever.
Eventually, more high calibre journalism will prevail. We will stop being wound up by two ladies being arrested over a walk with peppermint tea, or a Prime Minister having a cycle ride, and the world will suddenly look with real gravity at the situation they have allowed to go unchecked.
China is a real problem. It will either implode on its own, or with rigorous sanctions from leading economies. Ministers debated this very topic this week in Westminster and (true to form) contracted out the responsibility to companies for policing where items are made and the conditions they are created in.
We are in a cycle of needing cheap goods, built thousands of miles away in unknown (and sometimes appalling) conditions. It will take considerable resolve by developed economies to cease this dependency.
In the meantime, we believe that this is where we can be extremely proud of our Ethical portfolios. Whilst nothing can ever be 100% certain, it is good to know that our clients are collectively demanding higher standards of the investments that they hold. Together, I genuinely believe we can make a difference.
In Thomas and Thomas news, Katy is now on maternity leave and Bethan is being a great help. In honesty, we have been extremely busy as many clients seek to add to their portfolios, but we are coping well. I also may well have some brilliant and very exciting news to share in a week or two….
I hope to put out another article in the coming weeks for you. In the meantime, please don’t hesitate to contact me if you need anything at all. I know it is really tough right now, but you are not alone – we are here for you. If you just want a chat – give us a call!
My very best wishes as ever. Darren