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I hope this blog finds you safe and well and looking forward to the coming festivities?
You’ll remember last December that we had to cancel Christmas and on the 4th January the Prime Minister announced a national lockdown, instructing people to stay at home to control the virus, protect the NHS and save lives! Restrictions continued in one way or another until “Freedom Day”, 19th July. Who’d have thought that this Christmas we’d still be worrying about COVID with the spectre of a further lockdown.
I’ll be honest, this is my second attempt at writing this blog. The first was way too downbeat and I decided I needed to look for a more positive Christmas message.
Here we go... Christmas hasn’t been cancelled and erm... that’s it!
Seriously, I googled ‘positives from 2021 UK’ and the search returned things like ‘the Coronavirus Infection Survey’, ‘Positive test results for COVID’, ‘SAGE wants entire households to avoid events and gatherings…’ very depressing stuff!
But were there any positives? Answer; Yes! A world beating vaccine rollout, a robust economy with increasing wages, low unemployment and remember (I’d nearly forgotten) England reached their first major football tournament final since 1966 - we just won't talk about the ending!
In a pretty depressing year we at least had some highlights to celebrate, but what do we expect in 2022?
The FED - The Federal Reserve Board in the US have acknowledged that the current bout of inflation is not transitory, the Bank of England (BOE) have raised interest rates from historic lows. The rate rise (UK) is symbolic and shows the BOE are willing to take steps to curb inflation. Raising interest rates is a blunt tool but is proven to be effective against inflation and is positive for savers. Controlled (modest) inflation is also positive for equities/shares and borrowing, not least Government debt which has increased significantly during the pandemic.
The UK market is still significantly undervalued and the investment managers that we speak to are all suggesting a rotation into UK stocks especially as we come out of the pandemic and fund managers reallocate capital from stocks that have done particularly well over the last 21 months or so. Think the likes of Alphabet (Google), Microsoft, Apple, Tesla etc.
So as we say good riddance to 2021 and welcome in 2022 we hope that our economy returns to (near) normal pretty quickly. Investment markets don’t get spooked by the stop start of our economy through lockdowns and a renewed confidence will translate into better investment returns for us all.
Onwards and upwards......because hope is the only thing stronger than fear!
Merry Christmas and a Happy, Prosperous New Year from everyone at Fathom. We look forward to seeing you in the New Year.
We’ll be closed from 3:30pm on 23 December, returning on 4 January 2022. If you need us during this time we have an out of hours number 07845 243340.
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