2020 has been a challenging year; this is the consensus view. Although we started the year on an excellent footing, financial markets were soon decimated, within the first three months, as the coronavirus pandemic spread like wildfire across the world. Our research, an investment strategy for the worst of times, combines behavioural finance with statistics and identified common investor behaviours that often shape financial markets during global recessions. History may not always repeat itself, but it often rhymes. True to form, the behaviour of financial markets has been similar to that experienced during previous global recessions –
At this time of year, you would by now have read many letters or research articles predicting the key trends or themes to watch out for in 2021. We will add to this clutter, but do so by looking at the key trends that transpire when economies recover from deep recessions –
Despite the challenges experienced in 2020, the positive news around the development of a vaccine has fueled positive momentum in global equity prices over the last two months. History tells us that Global recoveries have generally been characterized by a broad-based rebound in economic activity and a normalisation of financial conditions. We hope you will have a great and restful festive season on this positive note because we have a lot to look forward to in 2021.
Kose MA, Sugawara N, and Terrones ME. (2020). Global Recessions. World Bank Group Policy Research Working Paper.
Lima Mbeu Investment Managers (Pty) Ltd is an authorised financial services provider in terms of section 8 of the Financial Advisory and Intermediary Act, 2002, FSP number 49018, Registration No 2017/399814/07. This document is for information purposes only. Past performance is not indicative of future performance. The information contained herein is derived from sources which are believed to be reliable. Any opinion expressed herein is based on the presenter’s current analysis and is subject to change. This presentation does not constitute an offer to sell or a solicitation to buy any security. Lima Mbeu has a conflict of interest policy which outlines how conflicts of interest are managed. This policy, as well as additional information about Lima Mbeu’s products, is readily available upon request or on our website: www.limambeu.co.za
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