12th, 17th & 21st

I hope that this update finds you keeping safe and well. Given this is a little extended from our last update seeing as we did that very early March with the budget being its sole topic.

The dates above as you may already know are the roadmap and time line we are all on to return to normal. With us just going past the first reopening on the 12th we are well on our way and the 17th is firmly in our sights.

With a move forward it was a sad day recently as I decommissioned the bunker (well the home office as it’s been affectionally renamed) and moved the final items back to the actual office.

The move back to normal office working for us as a business is a really welcomed move forward. The work environment will never be replaced by remote working in my view, and this view is being shared by Goldman Sachs who have committed to a new office in Birmingham of all places.

The financial world will offer more freedom and there will no doubt be some form of hybrid with there being some home working and fewer people in an office at one time.

The markets in the first quarter of 2021 have continued to advance and I have set out below the main indices along with 3 of the most popular mixed investment sectors.

FTSE100 4.97%
Dow Jones 7.13%
S&P 500 5.07%
MSCI World 3.95%
Mixed Investment 0-35% -0.54%
Mixed Investment 20-60% 1.00%
Mixed Investment 40-85% 1.87%

From the figures above the pure equity markets have fared very well and there certainly has been a bounce back.

The pressure has remained on the lower risk asset classes hence the mixed investment sectors not matching the pure equity returns. These sectors also consist of cash, gilts, property, and bonds.

This of course is a very small snippet of the bigger picture and with there being a rotation in investment styles since the turn of the year the more cynical (value) stocks have had a better time. They have been the poor relation for long enough, so this had to happen at some point.

However, the FTSE100 remains well below pre covid levels and the economy is still opening with us all taking very small steps back to a post lockdown world.

I do read more and more about the confidence returning and the expected boom to come.

Profit seems to be the buzz word and the returning of dividend payments as well. The banks certainly seem to be having a good time with profits “surging” as HSBC have stated.

Of course with the reporting low point of March last year everything since then has surged so we must always take such reports in context.

I must admit I was wrong in my forecast that the 12th would see somewhat of a fanfare in the UK markets, and this just didn’t happen. I have my eyes firmly toward the 17th now to see what effect this has.

Inflation, as I covered some time ago now appears to be firmly back on the radar with there being some small increases of late. This is a long term concern and although it may not feel like it right now this will and does impact our planning.

Rising inflation with low interest rates is not an environment we want to be in, and this will place a great deal of pressure on our long term objectives.  

With our own government stating that a 1% interest rate increase would make their own borrowing unaffordable I expect to see lower rates for a little time yet.

Sadly, there are no hidden gem savings accounts on the high street right now and the rates we are all getting are a little depressing!

The final date of 21st June is the day that all social distancing and normal life for us all will return. This as you all well know is some time off just yet and with the virus still taking hold in other parts of the world we might be moving forward, but others will not.

As always, we are here to support you in any way possible and if you do have any questions at all, please feel free to just get in touch.

Enjoy the Bank Holiday weekend and let’s hope for some better weather!