A positive economic outlook
2020 will certainly be a memorable year we will remember forever. Who would of thought in January how the year would develop, our main concerns back then were the impact of BREXIT. How most of us would now like to have BREXIT as our only worry?
Now, as we approach December, we look forward to the future, and how the economy will look to recover in 2021. Although some sectors of the market like hospitality will take longer to recover, there are some sectors that have seen growth in 2020, with home improvements on the agenda for lots of people, who are spending on their home with the money they have saved from not being able to go on holiday. How many people have had a skip on their drive this year?
Local companies we know have seen a surge in orders for home furnishings and décor. This is good news for them and shows people are confident in spending money, which helps boost the economy as this will be replicated across the country.
There is some vital position news, with COVID vaccines progressing at amazingly fast rates, with the very real possibility of several vaccines being available in early 2021. This will allow people to get back to a something like normal way of life.
Holidays are something most people have had to cancel or rearrange for a later date during 2020. Therefore, the demand for holidays in 2021 will be huge, as people look to make up for lost time to enjoy their leisure time with family and friends.
The FTSE 100 has seen a rise of 10% over the past fortnight, as optimistic news on the COVID vaccine has restored confidence in the ability of many companies to return to profit and growth. This gives everyone great confidence that when the pandemic declines during 2021, the economic outlook should be very positive across most sectors of the economy.
The benefit of an improving world financially in 2021 will see investments having a great chance of showing excellent returns over 2021 as the economy looks to bounce back. Quality companies with a proven track record of success and a history of growth in the economy will see a sharper rise in their businesses in 2021.
New companies and sectors of the market will grow from strength to strength in 2021, as people change their spending habits and patterns. Online retailers have seen huge rises in demand during 2020 and this will not change in 2021, with many consumers liking the convenience of online retailers, they will continue to use their services, so this is an expanding sector.
With an air of positivity in the economy, we have found that clients looking for medium to long term growth are keen to invest, as they feel there is excellent value in the current investment market.
A pension fund, regularly recommended by Brian Mole IFA has seen an increase of 5.4% last week, highlighting the positive news at present.
It is also important to understand that whilst the FTSE 100 has declined in 2020, many diversified multi asset funds have held value exceptionally well, with many seeing significant performance in the past few weeks. This reinforces the adage:
The Secret to Long-term Wealth is Time in the Market
Time in the market, as opposed to timing the market, does not involve short term predictions. This strategy proves that time and patience in the market is better than a quick sale. For example, when a person has an investment for 10 years, the positive effects of compounding and investment growth reap significant rewards. Patient investors gain a larger profit by allowing their investments to grow over time.
The secret to creating long-term wealth is spending time in the market. By doing so, the investor rides out the natural market cycles. For some people, it’s hard to invest that much time in the market, but they should remember how it aligns with their financial goals. Maybe they know that they’ll need the money for retirement or even purchasing a home. By waiting for steady growth over time, smart investors are able to achieve their long-term financial goals, as outlined in their financial plan.
It’s Never Been a Better Time for Financial Advice
For anyone weighing the pros and cons of time in the market vs timing the market, remember that time in the market offers a better outcome, even if it feels overwhelming amid market volatility and financial uncertainty. By investing with a long-term strategy and a holistic game plan created by an Independent Financial Adviser, you can balance your tolerance for risk with the unique situations in your life. At Brian Mole IFA, we are here to guide and advise you through the minefield of investing. We offer face to face or telephone appointments to discuss in detail your own unique circumstances and needs.