Editor's letter

Post-Covid life will look remarkably similar to pre-Covid life

Everybody is speculating on how life will look once lockdown is lifted. My guess, says Merryn Somerset Webb, is much the same as it looked before the virus.

A large part of the nation currently seems to be reading Claire Tomalin’s biography of Samuel Pepys. We are too. But my attention has been grabbed not so much by his experiences in the Great Plague as by the aftermath of the Great Fire, which he also survived.

The shock of the fire prompted all sorts of grandstanding. Take the rebuilding of the city. No one wanted to go back to the messy jumble of a fire hazard they had lived with before. Everything must change they said. A Rebuilding Act was passed stipulating that all new buildings had to be constructed of brick or stone. Splendid plans were produced of grid systems with church-filled squares and of long wide streets with plazas and a huge terrace on the Thames (this was Christopher Wren). None made it past the drawing board. Instead, driven by individuals wanting to get back to normal life, London rebuilt itself in “roughly the same shape as it had burned down,” says Charlie Lawrence Jones on CityMetric.

This is, I think, a pretty good metaphor for what will happen post lockdown. We have heard endless grand plans for the fixing of society one way or another over the last few months. There might be a bit of this. Perhaps there will be some improvement to our welfare systems and with a bit of luck to the management of our healthcare systems. Perhaps we will work from home more – although the extent to which anyone wants to do this will depend on how nice their home is and how well they already know their colleagues. And perhaps some of us will even move out of the cities temporarily (25% of London’s newly homeless did so after the Great Fire). But overall, odds are that even as governments bicker over grand improvement plans, ordinary people will return to post-Covid lives that have roughly the same shape as their pre-Covid ones.  

There is no alternative

One thing that definitely seems to be sticking with its shape is the stockmarket. For years now we have been being told that with yields non-existent and world’s central banks increasingly keen on money printing, there is no alternative to being invested in equity markets. That seems to be the case again (Bill Bonner has some ideas on in this week's magazine how modern markets reflect anticipated intervention rather than anticipated revenues). If money is going to keep pouring into the system – James Ferguson of MacroStrategy Partnership notes that the Fed has already produced as much QE in this crisis as it did over six years of the GFC – and rates are to turn negative, what are the options? (If you want to hear more from James, listen to this week's podcast)

Quite. You might want to invest via funds that give you exposure to gold and silver given the inflationary risks of extreme fiscal and monetary policy. Otherwise, big tech remains an option (this week, we explain why to buy Microsoft) as perhaps do European banks (I’m not sure I am convinced on this one yet). Committed contrarians might try Wetherspoon. Otherwise, given how we expect governments to bump up spending even more, long-term investors should look at infrastructure

Finally, on a less monetary note, if you need a staycation after lockdown, how about Durham? It’s been in the news lately for the wrong reasons, but once that passes, it will again be remembered as a particularly beautiful city that everyone should visit at least once.

Recommended

The coronavirus is scary – but it's irrelevant to your investments
Investment strategy

The coronavirus is scary – but it's irrelevant to your investments

The spread of the coronavirus is causing alarm around the world. And, while it could be a serious short-term threat to human health, it’s not somethin…
24 Jan 2020
Beyond the Brexit talk, the British economy isn’t doing too badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019
Beware: even the greatest brands can fail
UK Economy

Beware: even the greatest brands can fail

For decades, John Lewis seemed to exist in a parallel universe. Now, a grimmer reality has dawned
27 Sep 2020
What's behind Britain's coronavirus testing disaster?
UK Economy

What's behind Britain's coronavirus testing disaster?

Britain’s system of testing for the virus that causes Covid-19 collapsed just when we needed it most. What went wrong?
26 Sep 2020

Most Popular

How the stamp duty holiday is pushing up house prices
Stamp duty

How the stamp duty holiday is pushing up house prices

Stamp duty is an awful tax and should be replaced by something better. But its temporary removal is driving up house prices, says Merryn Somerset Webb…
25 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020