The tree is up. The hall is decorated. The presents are wrapped (sort of). There are eight boxes of crackers. I have just taken delivery of a 4.6kg turkey. We are ready. But for what exactly? Turns out no one is coming this year. And we aren’t going anywhere either. This is not the end of year we expected when we sent out 2020’s first issue in January. Then we were worrying about stockmarket valuations and shifting cash into commodities, which we thought might be at the end of their vicious ten-year bear market.
The future turned out to be as unco-operative as usual. There was no way to know in January that a pandemic would close the world; that democracy would be effectively suspended across the West; that markets would hit new highs amid both a supply and demand crunch; that fiscal and monetary policy would merge into one great stimulus machine, rendering valuations irrelevant; that the main press topic in Christmas week would be the great festive lettuce shortage; and that I would hit 26 December with 3kg of excess turkey to fricassee.
So what’s this year’s shock? Obviously, after the events of 2020, any forecasts must be read more for entertainment value than anything else. But in this week's magazine, Matthew Lynn offers a few of his expectations of the unexpected. I’m hoping his last (the FTSE 100 to 10,000) comes true. It has underperformed horribly, but it is cheap and has to be a better bet than some of the “capital-destroying businesses” Bill Bonner rails against. Max King lists the investment trusts that have disappointed and thrilled him this year; David Stevenson reiterates our view on commodities (definitely a buy); and in our Roundtable we’ve lined up some of our favourite stockpickers and forced them to give us their best recommendations.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
My own thoughts on 2021 will be familiar to regular readers. I think it will be pretty good. Vaccine roll out is faster than I expected (we are heading for one million a week), which should see the economy open faster than expected (when rising cases no longer equate to rising deaths, lockdown has to end). We are likely to see a wave of productivity as firms integrate all the technological lessons of 2020. All this will happen amid an ongoing wave of stimulus. Perhaps most importantly of all, the UK savings rate is still high – households have cash to burn. Where will it go?
Here is where I think the miseries of the investment world might be surprised. Think about what you most want to do right now. I’ll tell you what I want to do: drive and fly. And as soon as I can, that is what I will do. I will drive all over the UK seeing my family. I will take planes to all the places I want to go – Greece, Florida, Iceland and perhaps even to Japan for the Olympics (Japan last hosted the Olympics in 1964, a year that marked its shift from enemy country to global economy – see this week's magazine for why 2021 could be another good year in Japan). I won’t be alone. We often talk about the pent-up demand for goods created by the pandemic. But don’t underestimate the pent-up demand for physical freedom – and the oil, airlines, restaurant seats and cars that will be needed to fuel it. Here’s looking forward to the renewal of our commitment to that freedom in 2021 – and to the investment opportunities that come with it. A very happy Christmas and New Year to all our readers.
Our first issue of 2021 will be with you on 8 January.
-
Lloyds axes foreign currency fees for Club Lloyds customersClub Lloyds customers will be able to withdraw their money abroad without incurring any extra fees
-
How to invest during stagflationTrump’s tariffs look poised to push the global economy into a period of stagflation. We look at how to ensure your investments can survive a global slowdown.
-
Why are energy bills so expensive in the UK?Electricity bills in the UK are higher than in any comparable rich country. Some blame the net-zero zealotry of the government for that. What is really to blame for high energy bills?
-
Will Putin invade Europe? Why investors know Russia is a paper tigerOpinion Markets are right to ignore talk of Putin invading Europe, says Max King.
-
Why French far-right leader Marine Le Pen has been banned from running for officeMarine Le Pen, presidential candidate and leader of France's right-wing National Rally party, has been barred from standing by the country's judges.
-
Five years on: what did Covid cost us?We’re still counting the costs of the global coronavirus pandemic – and governments’ responses. What did we learn?
-
Will Trump force the Fed to lower interest rates?Opinion Markets are ignoring the risk that Donald Trump forces the central bank into reckless interest rate cuts
-
London can lure Brexit-fleeing banks back to UK – but the City must move quicklyOpinion Many banks fled to Paris in the wake of Brexit but are now in full-scale retreat. The City should move quickly to lure them back, says Matthew Lynn
-
Protests erupt in Turkey after the arrest of president Erdogan's rivalTurkey's president has jailed his main political opponent, Ekrem Imamoglu
-
What is the Mar-a-Lago Accord and why is it getting attention from Wall Street?On Wall Street, there is talk that Trump's tariffs aim to make the world’s leaders come crawling to Mar-a-Lago, his Florida residence
