The pandemic came as a terrible shock to the economy, worse than the global financial crisis of 2008-11, with a far deeper impact on investments.
For a few weeks, the FTSE dropped like a stone. Investors who kept their nerve and their portfolios intact saw a rapid rebound and now that rebound appears to be becoming a true recovery.
At Continuum, we are asking if the recovery could be good a time to invest.
Is recovery a done deal?
Expecting the UK economy to bounce back from the worst decline in 300 years in a matter of months is, of course, optimistic.
Figures from the Office for National Statistics (ONS) said gross domestic product – a measure of economic growth – grew by 4.8% in Q2 2021.
The underlying mood is positive and most observers agree that the UK economy remains on track for growth as restrictions are fully lifted.
Multinational investment bank and financial services giant Goldman Sachs has briefed clients that its expectation is that the United Kingdom will grow even faster than the US this year. It predicts UK GDP will rise by 7.8% this year.
Will recovery really turn into a boom?
For most of the past five years, global investors have stayed away from the UK stock market. Concerns about Brexit may have been one of the reasons. Now, with some at least of the Brexit issues ironed out and trade agreements starting to be made, there is plenty of scope for the recovery to continue.
Some of the older names in the FTSE will no longer be there. Traditional retailers may have had their day. But in their place are starting to appear new names, with new business models suited to post-Covid conditions.
It may take some months for the UK economy to recover lost ground, but there may be no reason for it to stop growing once it has.
But you should probably not invest on that basis.
Take a long term approach to your investment
The recovery may provide opportunity for investment growth if share prices continue to increase, but at Continuum we caution against an opportunist approach.
Certainly, in the current climate investors may be able to make some short-term gains if luck is on their side. We believe that your financial future is too important to trust to luck.
Our approach has a more scientific basis. Investment professionals know that it is time in the market that counts, delivering steady returns that reflect the growth of the market as a whole. There could be short term bargains to be had, but rather than risk your cash, it is better to set yourself long term investment goals and get our help in creating an investment strategy to meet them.
A broad-based portfolio, or even an index tracker approach, may spread risks and harness growth across an entire market.
At Continuum we can work with you to prepare an investment strategy based on your own circumstances and plans. It can take into account the potential of the recovery and may focus on sectors that offer potential in a post-Covid world – but it will certainly be aimed at steady growth to reach your investment goals.
So, to make the most of the recovery, the simple answer it to call us at Continuum, and get our experts working for you.
Simply call us on 0345 643 0770, email us at [email protected] or click on the ‘Contact Us’ link below.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.
The value of investments can fall as well as rise and you may get back less than you invested.
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