2020 was a year that no one expected. You could be forgiven for thinking that the biggest story of the year would have been the UK officially leaving the EU in January. Since then, COVID-19 has spread across the globe at an alarming rate, locking down countries and their economies for months on end.
However, as individuals and businesses have gradually learned to live with the virus, the investment markets have also found their feet.
What 2020 shows us is that, in the absence of a functioning crystal ball, it is not possible to predict where investment markets will go. Rewind to March 2020... who would have thought then that by January 2021 we would be in Lockdown 3.0 and yet the global stock market would be trading higher than it was in January 2020?
We have reviewed the performance of each of our portfolios in 2020, not just to illustrate the positive returns but also to provide further evidence that buying and holding a low cost portfolio with a focus on the correct areas of the market, is much more likely to provide the return you need than actively-managed funds that try to predict what the world will look like tomorrow.
The more efficient your investment approach, the more money there will be for you and your family to spend doing the things you enjoy.
The chart below shows the performance of Carbon’s six portfolios in 2020:
When markets fall, don’t panic. Here’s why…
Risk and return
Would you like Carbon’s Second Opinion at no cost?
A number of new clients have come to us in the last year because they have been disappointed or surprised by the extent to which their portfolio suffered in 2020. This was typically due to either having too much invested in the stock markets and/or having too much invested in the UK.
If this sounds familiar, or if you would like to discuss any areas of your wider financial planning or investment management, our Second Opinion Service may be of interest. This involves Carbon taking a fresh, objective view of all relevant areas of your finances and determining if there are any areas where some valuable improvements could be made. The service is free of charge for 2021.
If you would like to go ahead with our Second Opinion Service, please get in touch by emailing email@example.com
Matt Duncan is Associate Director at Carbon and can be contacted at firstname.lastname@example.org or by phone: 07717 423 329
The value of investments and the income derived from them can fall as well as rise. You may not get back what you invest.
This communication is for general information only and is not intended to be individual advice. It represents our understanding of law and HM Revenue & Customs practice. You are recommended to seek competent professional advice before taking any action.
Tax and Estate Planning Services are not regulated by the Financial Conduct Authority.
We have offices in Edinburgh, Glasgow, Aberdeen, Perth and London. You can contact us at any of our offices, or by email.
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The Financial Conduct Authority does not regulate some forms of tax advice.
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