C2S Talks to Janet Mui, Investment Director, Brewin Dolphin about her thoughts on the prospects for 2021
Most of us will have little fondness for the year just passed. The emergence of the first coronavirus cases in the final weeks of 2019 earned that year the dubious distinction of being immortalised in the virus’s shortened name, but those cases only became widely known about in 2020. That will be the year marked out by history as the start of humanity’s all-consuming battle against this virulent pandemic.
There is no doubt that 2020 was a difficult year for almost everyone. The global lockdowns during the Covid-19 pandemic resulted in a deep contraction for the global economy. In the UK, we saw business closures, job losses and rising government debt. Most economies made a start getting back to normal once lockdowns were lifted before further waves of the virus brought more restrictions.
Looking ahead, the prospects for 2021 look brighter – offering the prospect of a return to normality, and with that greater certainty. Governments will remain focused over winter on containing Covid-19 outbreaks, and there are logistical challenges to tackle as the various vaccines are approved, distributed and administered. However, the greater confidence resulting from the vaccines, alongside continued technological innovation, and a recovery in global economic growth should provide a positive landscape for investors. The incoming Biden presidency also heralds a return to international co-operation and efforts to combat climate change.
As many have observed before, the pandemic has accelerated a number of pre-existing trends. Technological innovation will continue to thrive after the pandemic and we will see an era of further change to the way we work and live. Online behaviours are likely to remain, particularly with a structural shift in habits and trends with far greater numbers of people shopping online, using technology and working from home. 2021 offers the path back to normality, but with the potential to make that a new normal, incorporating features of the connected world that was forced upon us.
We will need that potential if we are to confront the challenges that are on the agenda for 2021. Sustainability is one area we expect to see acceleration. Despite 2020’s challenges, we saw more net zero pledges from countries this year, most importantly the world’s biggest carbon producer, China. The market volatility also didn’t diminish the pressure shareholders are applying to drive investee companies to reduce their carbon emissions.
So we look ahead to the COP26 meeting in Glasgow in November as a focal point, and we expect to see more companies announcing their own net zero targets as a result.
In summary, as we emerge from the crisis, we expect the year to be characterised by a period of sustained recovery, and growth across major equity markets. This cycle has played out plenty of times before. For example, in 2010, following the global financial crisis when investors were unsure of the sustainability of market growth we were in fact seeing the start of a long bull run.
Of course, how quickly vaccines can be rolled out, and the speed at which the world can recover from the impact of Covid-19, remains to be seen. But overall, we expect economies will see a boost from pent-up demand as people start to spend again, and sectors start to recover.
Get in Touch with the Team at Brewin Dolphin:
Brewin Dolphin was founded on the belief that the successful management of wealth takes an understanding of money but is rooted in an even deeper understanding of people. So before we invest your money, we’ll first invest in our relationship with you.
We have the technical skills to make the most of opportunities to protect and grow your wealth. But more than that, our ability to build strong relationships means we can create the bespoke financial plans and investment portfolios that will meet your unique ambitions and deliver peace of mind that your interests are in the right hands. We have 30 offices across Britain and Ireland to bring us closer to you and enable us to combine the best of local understanding with national scale and perspective.
https://www.brewin.co.uk/our-people/janet-mui
email: Helen.Farleyhiggs@brewin.co.uk
