A global pandemic that infected around 500 million people in four waves resulting in tens of millions of deaths around the world. Economic upheaval and permanent changes in working practices.
It sounds familiar, but what we are actually describing are the events a century ago and Spanish Flu rather than Covid. The parallels are striking, but it is the events that followed that are important. The end of that pandemic saw a proliferation of new technologies, a transport revolution, new international relationships and a soaring stock market. The following decade was one of economic prosperity as motor transport, radio, motion pictures and jazz reshaped the world.
At Continuum we are looking at whether we are heading for a new Roaring 20s.
Will history repeat itself?
The economic miracle of the Twenties didn’t really begin until July 1921, when both the pandemic and a post war recession ended and boom psychology set in as the world went back to work.
We may already be seeing the first signs of something similar, as lockdown ends and releases pent up demand. But recovery – welcome as it is – is one thing. If the 2020s are really going to roar, there will have to be some new factors driving prosperity.
Perhaps the most obvious candidates are already here. Electric road vehicles could mean a real resurgence for the UK motor industry, and the technology that is driving a new generation of road vehicles could translate to other sectors. Everything from vacuum cleaners to aircraft is likely to be rechargeable.
The pandemic lockdown has already accelerated the adoption of technologies such as videoconferencing and digital commerce and cloud computing is helping to support the idea of working anywhere.
There could be some dramatic social changes in the years ahead. The 1920s and mass transport saw the growth of cities. The 2020s, with remote working, the internet and cloud computing could reverse the trend, with people leaving the bustle of the city for a life in the country, while still being in reach of their virtual desk.
The robots may finally be coming, there have been huge developments in medical science and biotech and there is a growing awareness of the need to live and work in a greener way. Fortunately, renewable power generation is replacing fossil fuels and delivery companies are about to start using drones to drop off your next purchase right on your doorstep.
All these factors may contribute to an exciting decade. They could also mean some big changes to your financial plans, with the potential for rewarding investments in new business sectors as well as the need to divest from areas which may have had their day.
Finance and investment in the new roaring 20s
Growth sectors in the 20s may be very different to those of the first two decades of the millennium.
So where and how should you invest?
Online business could continue to thrive and you might look at new technology sectors. But although there could be some relatively safe investment bets with renewable energy and with commodities such as lithium, central to battery tech, the future is unknowable. The pace of progress is so fast, the real growth sectors may not have been invented yet. If you are going to plan your investment portfolio for an exciting but unknowable future, you might need some expert help.
Preparing for the roaring 20s with Continuum
After a global downturn as dramatic as the one we have gone through, a boom might be very welcome.
Some investment professionals may already be investing accordingly, looking at promising biotechs, new logistics providers and green energy businesses amongst others.
Some may be more cautious. Remembering that the future simply cannot be predicted, they feel that the solution is to spread and diversify.
Your own investment plans need to be based on your own circumstances and plans – as well as the direction you expect the next few years to take. Speculating on a new and unknown sector may be exciting, but the risks may be too high for you.
At Continuum we can work with you to understand your needs and develop an investment strategy to help you reach your financial goals – whether or not the 2020s start to roar.
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.
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