Here's looking forward to freedom in 2021

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 to the investment opportunities that come with it.

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.

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.

Recommended

Imperial Brands has an 8.3% yield – but what’s the catch?
Share tips

Imperial Brands has an 8.3% yield – but what’s the catch?

Tobacco company Imperial Brands boasts an impressive dividend yield, and the shares look cheap. But investors should beware, says Rupert Hargreaves. H…
20 May 2022
What's behind Sri Lanka’s crippling debt crisis?
Emerging markets

What's behind Sri Lanka’s crippling debt crisis?

Sri Lanka has been hit by a triple whammy of economic shocks and has gone to the IMF for a bailout. It may just be the first domino to fall in a globa…
20 May 2022
Investing in drugmakers: uncommon profits from curing rare diseases
Share tips

Investing in drugmakers: uncommon profits from curing rare diseases

Treatments for medical conditions with only a small number of sufferers can still be very attractive for pharmaceutical companies and investors becaus…
20 May 2022
Share tips of the week – 20 May
Share tips

Share tips of the week – 20 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
20 May 2022

Most Popular

Barry Norris: we’re already in the 1970s. Here’s how to invest
Investment strategy

Barry Norris: we’re already in the 1970s. Here’s how to invest

Merryn talks to Barry Norris of Argonaut capital about the parallels between now and the 1970s; the transition to “green” energy; and the one sector w…
19 May 2022
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves looks at the FTSE 100’s top yielding stocks for income investors to consider.
18 May 2022
Share tips of the week – 20 May
Share tips

Share tips of the week – 20 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
20 May 2022