C2S Talks to Ed Mawle, Senior Investment Director at Investec about his views on 2021
Investec’s business is looking very strong as we enter 2021, despite the market turbulence and operational disruption experienced in 2020. In large part we can thank the loyalty of our clients and the resolve of our staff for this, but as an organisation we have had to adapt very quickly to the changing working environment and engineer new working practices that re-imagines what ‘Team’ looks like. Technically speaking we can operate very efficiently from our home offices (or kitchen tables in my case!) and so our client service levels haven’t been affected, but we have been conscious of the limitations of these new working arrangements in the following areas:
- Networking and Business Development
- Preservation of culture and team unity
- Mentoring
Clearly all these areas are vital for every thriving organisation and we are working hard to overcome these challenges, but communication is key, as always One benefit of being locked down is that we have spent less time on the road and so our carbon footprint is vastly reduced. Counter-intuitively we have probably spoken to our clients more and we have all learnt to use video-conferencing technology and so have probably ‘seen’ more of our clients as well. We have learnt new techniques for business development too; examples include hosting virtual wine tasting events, hosting presentations from the astronaut, Tim Peake, and giving clients a virtual tour of Tate Modern! As a result our new business pipeline is as healthy as ever because there is always a need for good financial advice and investment management because people are still inheriting money, selling businesses, establishing trusts, saving into pensions and (sadly) getting divorced.
Looking to the year ahead I am minded of the wonderful quote from the Danish Nobel Prize winner for Physics, Niels Bohr, who said “Prediction is very difficult, especially if it’s about the future”. It goes without saying that 2020 was a year few could have predicted but as we embark on 2021 we have a lot of known ‘unknowns’, ie the ramifications of Brexit, the change of US president, COVID Vaccine, etc. which the market can probably cope with in its stride. However, to quote Donald Rumsfeld, it is the ‘unknown unknowns’ that make predictions so hard. For what it is worth I think it likely that the investment markets will have another good year due to pledged governmental support for the global economy via ‘QE Infinity’. This may be storing up trouble of a different kind for us further down the road in terms of inflation caused by monetary debasement, which is why I continue to like precious metals, but that is for another day.
In terms of investment trends, I am expecting:
- ESG (Environmental, Social and Governance) factors to play an increasing role in Finance as a new generation of Millennial’s gain more influence in society (the Greta Thunberg effect)
- A rise in the influence of, and demand for ‘Impact Investing’
- The further democratisation of the investment markets. Millions of new investors emerged in 2020, and thanks to You Tube, Fin Tech and a lack of sports betting, a new generation of younger, savvier, impatient investment traders has been born whose influence can only increase
- Alternative energy sources will gain ever more traction as an investment theme, steadily replacing Oil. Eg Solar, Wind, etc
- Electric Vehicle adoption to go mainstream, with various battery technology companies proving highly rewarding to the ‘adventurous’ investor
- Crypto-currencies to go mainstream
- Inflation, but not immediately.
- The Gold price to go to $3,000 (currently $1,900) and the silver price to go to $50 (currently $27)
As we start 2021 with the prospect of a few more months in strict lockdown, it would be easy to be depressed but we must remember that this period will pass and the human spirit will overcome. 2020 forced us all to re-evaluate what life is all about, what is important to us, what relationships matter, what we want to achieve in life and how we are going to get there. Some unlucky people have had change forced upon them, whilst others have taken this opportunity to effect change for the better in their own lives. Everyone has upskilled themselves in many technological areas. Organisations have adapted and evolved. We’ve all learnt to trust that colleagues really ARE working when they are at home, and in many cases possibly too much. 2020 has simply speeded up societal trends that were already under way and so I am excited to see the fruits of the rapid pace of innovation that COVID-19 has heralded, albeit we want to see the back of this odious virus as soon as humanly possible.
Get in touch with the team at Investec:
https://www.investec.com/en_gb/wealth.html
Email: Ed.Mawle@investecwin.co.uk
The information contained in this article does not constitute a personal recommendation and the investment or investment services referred to may not be suitable for all investors. Any opinion or estimate expressed in this publication is Investec Wealth & Investment’s current opinion as of the date of this article and is subject to change without notice. The value of investments and any income from them is not guaranteed and may go down as well as up; you may get back less than the amount invested. Past performance is not an indication of future performance.
