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Financial markets post pandemic.

by | Jul 30, 2021 | News | 0 comments

 

Thoughts from one of our Investment Managers Stephen Lovelock.

 

2021 has been labelled as the “year of the reopening”. Markets are now moving out of the pandemic period and entering an ‘in-between’ stage, where investors will have to be far more astute to discern which companies just rode a Covid wave and those that can capitalise long term. As talk of the end of the Covid-19 pandemic builds, concerns of inflation are on the agenda. Is the current talk and concerns about inflation just a flash in the pan as a result of the rapid recovery, after last year’s Coronavirus slump? The question on many investors’ minds, is if inflation is to continue, how high can it go and is it here to stay? There are some that say the US and UK are eager to run their economies “HoT”. If things slow down and inflation cools later this year, they may well pour more fuel on the fire. Inflation could become entrenched.

 

Inflation in the UK measured by the consumer prices index (CPI) rose to 2.1% in May from 1.5 per cent in April, exceeding market expectations and the Bank of England’s long-term target rate of 2%.

 

As we know inflation can eat away at investors’ returns, with cash, bonds and growth stocks on high valuations particularly susceptible. Investors may wish to think about diversifying away from the assets that have served them well over the past decade if the recent spike in inflation becomes a longer-term issue.

 

Investment trusts are good at protecting investors from moderate levels of inflation, as many trusts have revenue reserves and can support their dividends. However, because of widespread dividend cuts during the last year, some trusts reserves were diminished. Historically, trusts investing in property, infrastructure and commodities offer some protection from inflation. With shares in Real Estate Investment Trusts (REITS) also having a history of outpacing inflation.

 

There are other issues and concerns, which Covid-19 trends are here to stay, and which will soon be a distant memory. Will we return to offices? Will the high street survive? Will international travel bounce back?

 

Another factor to consider is despite progress in US-China relations, the Global economy is still under extreme stress and the path to a full recovery is unlikely to be smooth. We have yet to see the full impact of reopening the country but remain optimistic about the ability of vaccine delivery and the human adaption to normalise economic and social behaviours.

 

Emma Tuckett

Investment Manager

Well-respected Investment Manager, Emma Tuckett, has joined CFM following a successful career at Killik & Co.

After nearly a decade working in Trading and Investments, Emma has worked with clients from a wide range of backgrounds and has extensive experience in Advisory and Discretionary Investment Management, with a particular focus on ESG investing and helping clients align their investments with their long-term objectives and values.

emma.tuckett@capitalfinancialmarkets.co.uk

Joanne Hill

Compliance Manager

Joanne has joined Capital Financial Markets as Compliance Manager having worked in the Independent Financial Advice sector for over 30 years. 

Joanne holds a degree in Business and Finance, the CII Diploma in Financial Planning and has a wealth of experience and knowledge within Financial Services.  Joanne’s role is to protect both Capital Financial Markets and our Clients.

joanne.hill@capitalfinancialmarkets.co.uk

Saffron Heasley

Client Administrator

We are delighted that Saffron joined the CFM team as our business apprentice capably fulfilling the Client Administrator role. Saffron brings enthusiasm, reliability and a strong willingness to learn. In this role, Saffron supports the smooth day-to-day running of the business, providing essential administrative support across the team helping to ensure processes run efficiently and compliantly.

With a keen eye for detail and a proactive approach, Saffron is developing a solid foundation while working closely with colleagues across the organisation. Saffron is a valued member of the team and plays an important role in supporting CFM’s operations as we continue to grow.

saffron.heasley@capitalfinancialmarkets.co.uk

Paula Mitchell

Head of Operations & People

Having worked with us as a consultant for over eight years Paula brings that familiarity to the organisation and has joined the CFM team as Head of Operations & People.

A seasoned finance and HR professional with a masters in HR Management, Paula combines analytical strength with a people-centred approach to drive operational excellence. Paula will be leading the team and supporting Paul with the operations and people strategy ensuring sustainable growth and the smooth running of the business.

paula.mitchell@capitalfinancialmarkets.co.uk