Cotswolds Lifestyle Mar - Apr 2020

The big investment
themes on the
horizon for 2020
ADVERTISING FEATURE
James Holroyd, Assistant Head of
Worcester Office, Canaccord Genuity
Wealth Management...
We continue to experience one of the longest bull markets
in history, despite the uncertainty and unpredictability in the
investment world during 2019. So, will it last? Nothing lasts
forever, but we do see it continuing in 2020 and maybe beyond.
Here are our top four themes that we think will affect investment
this year:
1. Interest rates: Understanding the path of interest rates is
an important exercise when managing multi-asset portfolios,
although investors could be forgiven for thinking they may never
go up again, as they’ve been low for so long. That said, if politics
becomes more fragmented in the next year, it’s possible we
could see more socialist policies, which could drive interest rates
higher.
2. Technology: Technology has a fundamental role in generating
economic growth and capital appreciation, but our faith in
technology as a force for good was shaken by the Cambridge
Analytica scandal and others. However, as environmental, social
and governance (ESG) investing grows in popularity, it will enable
investors to enjoy better outcomes and ensure capital is directed
to the right technology companies and perhaps even those
helping to make the world a better place.
3. Politics: The Trump vs Xi Jinping trade wrangling has made
markets twitchy and the polarisation in politics will continue to
have an impact on markets. In a post-Brexit UK, careful ‘bottomup’
stock picking will be the order of the day. Ultimately, investors
need to pay attention to central bank policy, whose stimulus can
offset much of the political risk.
4. Factor investment: The factor approach has become popular,
because indices constructed using factors such as ‘value’,
‘size’, ‘volatility’, ‘quality’ or ‘momentum’ have all outperformed
traditional equity indices. It could be that 2020 is a year where
the ‘value’ factor leads the way, however, committing too much
to one factor may be foolhardy.
In investment, there are opportunities on the upside and
opportunities on the downside. The trick is to use all the
information available to you to make an informed decision – and
have the flexibility to change direction if you have made the
wrong call.
canaccordgenuity.com/wealth-management-uk/investmentthemes-2020/
Investment involves risk. The value of investments and the income from them can go down
as well as up and you may not get back the amount originally invested.
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