Time to reflect and to look forward
“January is a great time to reflect and to look forward….
“January is a great time to reflect and to look forward.
January takes its name from the two-faced Roman god Janus, who looked both back to the past and forward to the future. That seems particularly appropriate today, when we are looking optimistically towards the future, whilst warily thinking about what we have left behind in 2020.
I will be the first to admit that since the start of the crisis I have been at the pessimistic end of the spectrum of expectations for economies and financial markets. Though thankfully, to some degree I have been wrong.
Though from the perspective of markets, I remain worried that we are living in a bubble and when I look beyond the pandemic, markets could get worse before they get better. I find myself constantly pointing out unemployment stats, government debt levels and highlighting businesses going bust.
We have to accept economies will be deeply scarred by the impact of COVID and they will take a very long time to heal.
When delivering client valuations the feedback I am getting from our clients is one of surprise when they see how well their Innes Reid portfolios have held up during the pandemic.
Clearly, this is not by chance and the valuations confirm we have been positioned correctly.
When viewing valuations, I stress to clients it is important to remember investing is for the long term, not a few good days, and markets don’t go up in a straight line. The global economy faces many challenges even once the pandemic has passed.
Investors are to some degree looking beyond COVID and we believe it is right to do so. We accept COVID risks have not been removed and a second wave is clearly upon us, but this is largely short term and our clients are investing for the medium to long term.
The market downside to date has been offset by ‘whatever it takes’ global fiscal and monetary policy support from national governments. Of course, once COVID is decisively put behind us, the consequences will have to be confronted and the accumulated national debts will have to be addressed. That, however, would almost certainly be as a result of a positive COVID outcome and so should not be feared today.
There will come a point in time when Governments will have to balance the books and taxes inevitably will rise. As tax legislation changes, Innes Reid will be here to plan and ensure we reposition our clients as tax efficiently as possible.
It is so difficult to predict when ‘normal’ levels of economic activity will return, However, the clear catalyst for the recovery in Global Markets is the end in sight to the pandemic, as the vaccine rollout is now underway.
In years to come I think we will look back on the impact of COVID and the societal changes it has brought about. Our habits have changed and we won’t fully return to the way we lived pre pandemic. What we are witnessing is the unstoppable march of technology as we have all had to adapt to a different way of life and we are getting used to it.
Many uncertainties remain and we must fully expect periods of heightened volatility. Our message will not change, it is not timing the market that matters, it all about time in the market.
It is important to have an attitude that says ‘I’m not going to panic or be panicked’ and to stick to your plan.
Rest assured at Innes Reid we have never worked harder to ensure we continue to navigate our clients planning through this crisis and beyond.
Thank you for being a client and taking time to view this video.
Let’s look forward to a better 2021!”
Mark Reidford
Managing Director
Time to reflect and to look forward.
Time to reflect and to look forward – If you have any queries, please contact us by email: info@innesreid.co.uk or telephone our office: 01244 347 583.
For further business updates regarding coronavirus, please visit our designated webpage at: www.innesreid.co.uk/coronavirus/
