2021: the year ahead. Maybe?

Well, 2020 didn’t go the way we all expected. Our head of multi-asset investments, David Coombs, has tossed out his old fortune-telling teacup and reached for the magic 8-ball this year.

7 January 2021

Crickey, 2020 was pretty dull. Well, my social life was, in any event. Just walking to the post box during November’s lockdown was an eagerly anticipated event.

The reality is, of course, that it will be one of the years in our lives that we will never forget. Tragedy, incompetence and uncertainty are just some of my suggestions for a word map to illustrate the past 12 months.

My predictions this time last year, funnily enough, were way off the mark. I did not anticipate the pandemic. As I always say: don’t invest in line with predictions, it’s events, dear boy, events that are important. Or was it Harold Macmillan who never said that? My memory is running a bit during this latest stretch of home detention…

So, with more trepidation than usual, here are my top 10 predictions for 2021. As always take with a pinch of salt. I will be ignoring them:

  1. There will be endless ‘growth’ vs ‘value’ debates, even as value underperforms again
  2. People start to realise the growth v value debate is ridiculous
  3. UK 10-year gilt ends the year at 0.80%
  4. The inflationistas get very excited in the summer, then deflate as the ‘base effect’ (a sharp increase because of a low base number) wears off
  5. We reach peak social media: people go out and have a chat (except in Scotland – see 10 below)
  6. UK smaller companies outperform all other European equity indices as the sky doesn’t fall in after Brexit
  7. The end of the App Bubble: investors finally realise they aren’t ‘tech’ companies, they are marketing enterprises
  8. People in Cornwall start buying cheap second homes in London as everyone now lives in the Cotswolds and dials it in
  9. Oil companies outperform as Generation Z realises how the plastic in their phones is made
  10. Nicola Sturgeon bans talking in groups of two or more, even by phone