When thinking about your pensions and investment strategy over both the short, medium and long term, we must all look at the fact that a second coronavirus wave is upon us and could get worse. The Chancellor has cancelled the Autumn Budget as there is little point in planning when there is no ‘light at the end of the tunnel’ just yet.
There are also reports of not having enough infrastructure, not just for mass vaccination whenever a vaccine is approved but also for more mass testing.
We have seen reports that there could be a new coronavirus strain every 5 to 10 years. Therefore, we should plan and adapt our pension, investment, business, career and life choices based upon covid being here for some time if not indefinitely.
In the short term, it is going to be volatile, but those that have a plan will excel.
Plan for short term negative interest rates, where fixed interest funds will initially see capital values rise but as governments will then need to tackle and devalue long term debt, expect stimulus to force inflation.
Expect price rises, expect stimulus, expect salary rises on viable jobs, expect property falls but then another boom – we are going back to the 80s of ‘bust - boom – bust’ economics. Expect property rises in 2020, expect property price falls in 2021. Expect huge redundancy numbers in the latter half of 2020 when the Job Support Scheme starts and throughout 2021 again as the Job Support Scheme winds down and businesses either adapt and become more efficient or fail to adapt to a new trading world.
We have already suggested that we are looking to invest in inflation hedged type funds, property as well as equities being boosted artificially with stimulus to set new, higher benchmarks as the market ‘norm’.
Longer term, the jobs market will change with many more of us working remotely, social habits will also change, shopping will change and traditional services industries will change.
Start to think differently about how we all live our lives. Be positive, think of the future. Make plans right now for a new world.
Think laterally about those coming changes. Online and remote business and services, shopping, staycations and ‘campervans’. People will change how they live, work, eat out, holiday etc.
We are constantly trying second guess the future. If nothing else – watch sci-fi and futuristic movies to get an idea of what could be your next career step, your business, your house move, your pensions and investments.