Your Q4 2020 outlook

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There are lots of decisions we have to make when it comes to investing your money, from understanding how much risk you want to take and working out what investments to put your money into, to designing strategies so we can get you the best possible returns. The economic cycle and market conditions are really important when it comes to making these decisions, because they can affect how your investments perform, so we always play close attention to what’s going on.

To keep you updated, each quarter, we speak to Trevor Greetham, Royal London’s Head of Multi Asset Investments, to find out what’s been going on in the global economy and how this could have an impact on your money.

This video was recorded in September 2020 during the coronavirus outbreak. Please remember that the value of investments can fall as well as rise, and you could get back less than you pay in. 

Hello, my name is Trevor Greetham. I’m Head of Multi Asset for Royal London Asset Management. I’ll be speaking to you today about what’s been happening in the world over the last three months and what it means for your investments. And also a bit of a look at what we think could be happening next.

The main change is the world over the last three months has been a really quite strong recovery in economic activity as the world economy reopened after the lockdown that happened pretty much everywhere in the world in March and April this year to try and control the coronavirus. That stronger economic activity, as more of us have gone back to work or spent money in the shops or restaurants, has helped share prices to rise quite a lot from where they got to in March. In particular, the US technology sector has been doing really well because we’re using technology a lot more in our daily lives than we used to be.

In the short-term things have got a bit more choppy in the markets though, because the pace of recovery is beginning to slow down. That’s partly because there’s an increase in virus numbers again now in the UK and in Europe and that’s causing social distancing to tighten up again. It’s partly because there are some concerns about the Brexit negotiations and what kind of trade deal we may or may not be leaving the European Union’s transition period with. And also concerns about the US Presidential Election, tensions leading up to it, and the possibility that President Trump may lose by a narrow margin and try to stay in the White House by claiming that postal votes had been fraudulent – and that would unsettle financial markets at that point.

So some concerns, but in the short term only, because longer term we’re quite optimistic that we will defeat this virus – either through gradual build-up of immunity or through a vaccine, and we’re likely to see several vaccines start to become available in the first half of next year. At the same time, you’ve got governments willing to spend money to support the economy. You’ve also got central banks printing money and interest rates are likely to stay very low for a long time to come. And that means when the recovery gets going it should be quite a strong recovery and should be pretty good for your investments.

In the short term then some volatility, but by investing across a range of different asset classes in a portfolio of investments, we think that’s the best way to control the risk and in the long term we think it makes sense. I’ll come back to you in three months’ time for an update on what’s been happening in the economy and financial markets over the next three months, and also I’ll have a chance to have a look at what we think may be going on in 2021. Thank you very much.

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