December 2020 Newsletter
‘I’ve now seen everything’ – a personal note to end the year…
If we ever thought we had seen it all, markets in 2020 made us realize we had not!
This time last year, several themes were on our minds (apart from Christmas puddings): Brexit, trade tensions, the coming US elections, general economic strength (though there was awareness of headwinds like global debt levels and some thought of whether quantitative easing efforts would finally end). So, there was an initial promising start – then Covid-19 hit and calendar Q2 was full of volatility and weakness – markets fell, currencies fluctuated… the oil price even went into negative; I had never seen that in all my 40 years of finance experience.
But just when concern was at its highest and worries at their most extreme, markets turned a corner. And since then, there has been a strong recovery in US and Japanese stocks, a solid general uptick in Australia and some recouping of losses in Europe. Commodities are overall weaker than a year ago but have also been in an upward phase. However, sectors like property continue to pose questions as demand for space remains under something of a COVID-cloud e.g., is it possible that needs for office space will be less as more people work from home while needs for warehouse and distribution space grows as online purchasing grows?
Other themes also continue to play out. For example, as Brexit enters the next, important phase, the practical impacts are being experienced – most recently, congestion between England and Europe at ‘border’ crossings. Then there is the approach the new US administration will adopt in international (as well as domestic) affairs – the tough line adopted by the previous president with China will quite possibly continue but with more nuance and the nurturing of more international backing, for example. On the Covid-19 front, the much-anticipated approval and dissemination of vaccines is being rolled out, although amidst concerns over new strains and new spikes, and possible some questions over longer-term issues (like secondary side effects in years to come); it is interesting also to consider that the average length of vaccine development historically is around 17 years, with the fastest in 4 years, yet COVID vaccines have been developed in around one year.
Portfolios have reflected all these developments and will continue to do so. There are grounds to be positive, yet we also adopt a cautious, watchful, and considered approach. We are very much guided by research and a careful approvals process. Our operating framework of providing advice is closely monitored and audited by our dealer group, Synchron, which provides much valuable ongoing guidance and support. Just like the treatment of Covid-19 has been based on science, when investing, we have – and will continue – avoiding reacting to extreme ideas or making knee-jerk decisions. Our decisions for clients will be based on the ‘science of investing’: sensible, considered, tried-and-true strategies and reliable participants and suppliers of financial products.
As always, we remind clients that it is wise to have their affairs reviewed annually. Our service standards and agreements reflect this and are tailored to your needs. We are always happy to hear from clients, so do feel free to contact us. We are also always delighted when you refer friends and family – because you refer them, they receive a complimentary meeting to discuss their needs and you receive in return to express our appreciation.
In closing, remember our office is formally in recess from close of business Wednesday, 23rd December, but we are back on Monday, 4th January. So, until we see you in 2021…
Stay well, Keep Safe, Happy Christmas and All the best for 2021!
Bruce, Ashlee and Team Nova! 😊