Ho Ho Ho – here we go… again

I hope that you have had an enjoyable Christmas and are looking forward to ringing in 2022.

Looking back at my comments from this time last year, we had just seen new tiers being introduced in London and the Southeast.

Fast forward 12 months and it appears we are not going to see restrictions in England, and we are free to make our own decisions, for now.

With hospitably mainly in mind here they have had some support, and, in some camps, they feel this isn’t enough. It appears that the public have in effect undertaken their own form of lock down and stayed away from many hospitably venues.

The home markets are expecting some form of further support and a lot will hinge on the next couple of weeks post New Year celebrations.

There is talk today that there will be some form of restrictions if case numbers and more importantly hospital admissions get out of hand.

We have finally broken the 5% inflation figure with the most recent being 5.1% in November and that being a 10 year high.

We know that energy costs are a main driver of this, and we now expect a 6% top end with a cooling in the Spring.

The risk of inflation remains front and centre in what we do. Cash rates are/will move but they will NOT meet this inflation figure to keep their buying power.  That will go hand in hand with tax increases and real wage increases not keeping pace with inflation.

2022 could well provide greater pressure on household budgets than what we have seen in the last 2 years.

The hope of a Santa rally this year hasn’t really materialised and we have seen things be quite subdued in these days between Christmas and New Year.

Given we still find ourselves in this uncertain situation we will be undertaking a “year in rear review” early in the New Year and providing commentary on your own portfolio approach.

I feel this adds a great deal of value to assess how things look rather than just look toward the main indices or the media for their views.

A final graph to see off 2021, set out below shows the FTSE100, MSCI World, CPI, RPI and Gold, Year to Date.

It’s interesting to see equity markets show such a strong 2021 return with a negative in gold over the same time. Given we have seen extended periods of volatility in the market’s gold is used as a “safe” haven but it appears this year that risk is the winner.

Oil saw a resurgence in 2021 after being an unwanted commodity in 2020 and the move toward a green recovery and economy has stalled in some part.

However, the longer-term journey of responsible investing will continue to grow and most if not, all asset managers will move their approaches more in line with these principals.

The Environmental, Social, Governance (ESG) ethos will continue to grow and mature more and more in the coming years, and I feel there is a lot more to come.

I wish you all a very happy and healthy 2022 with us all returning to a more normal day to day existence.