Going Back to Value Investing After Pandemic
Published / Last Updated on 07/05/2021
After the Brexit Referendum, the subsequent political arguments in Parliament, the subsequent Brexit Agreement, Donald Trump and then during covid-19 lockdown, we favoured global ‘blue chip’ Equity stocks funds such as those tracking the FTSE 100 and Dow Jones Index.
This was because firms that trade globally were better placed to ride out local uncertainty. E.g. FTSE 100 moved to record highs during Brexit negotiations and the transition period. The pound was weak meaning companies that have significant trade overseas in $ or € made even greater profits when bringing them back into the UK.
As you know, more recently we have started to move towards both large and small companies with significant internal trade. By this we mean the Dow Jones, FTSE 250, FTSE 350 and FTSE All Share (the 1,000 next biggest companies).
We are suggesting now that as certain countries, like the UK, but not all, start to control and come out of the other side of the pandemic, a huge drive will come from consumer spending in local markets.
Global online retailers and remote services and communications have done exceptionally well during the pandemic but with governments, bank leaders and commentators all now predicting record economic activity over the coming year, we suggest value is to be found in businesses and investment funds that rely on local, open markets:
Think value, think environmentally friendly, entertainment, hospitality, travel, leisure and the high street.
