On Monday last week, I penned the introductory paragraphs for our Investment Review document which will be issued early next year to Buckingham Gate clients.
One of the opening paragraphs of my message read:
I do hope that you have been able to enjoy some of our newfound freedoms, even if tentatively so, and here’s to hoping that we are now firmly on the path to recovery from this dreadful pandemic (although I suspect we may have one or two further bumps along the way yet).
Well, just a few days later, one of those bumps arrived. Although it looks more like a mountain than a bump at the moment.
Just when you thought it was safe to come out from behind the sofa and turn the news on again, another new Covid variant comes along, proving just how unpredictable life can be at the moment.
Of course, the media is taking the usual sensationalist view, making each new case discovered sound like it is the end of the world. Now, please don’t misunderstand me – this new variant may well be very serious – it is simply that we don’t yet seem to know that it is very serious, so it always baffles me just how panic-inducing some of the reporting around it can be. In fact, some of the news stories on Wednesday and Thursday reminded me of the early days of the pandemic.
The way governments are reacting suggests that something serious is afoot, but that would seem to contradict the reports from Doctors out of Africa over the weekend who are suggesting that most people infected with Omicron have fairly mild symptoms. Perhaps the governments know something we don’t?
The stock market had a little panic on Friday and the usual ‘worst day since the last worst day’ headlines ensued. At the time of writing on Monday morning, the FTSE 100 has opened up around 1% or so, suggesting that last week’s market wobble may have been temporary.
Not to say that there will not be further stock market challenges ahead (if anything it has been surprising just how resilient markets have been, given the world we have been living in – some people would say that market gains have been overdone).
I would certainly be feeling pretty miserable if I were running an airline or travel company right now as governments around the world begin to re-impose travel bans or restrictions. I would certainly be feeling pretty nervous right now if I were running a hospitality business in the run-up to the key Christmas season, with the prospect of new restrictions or work-from-home orders looming large.
One thing we probably can say though is that we are in a much better place now than we were 18 months ago to handle this new variant. The vaccines and medicines that are available now are much more developed and much more quickly adapted than we had before.
Of course, we will continue to monitor developments very closely, both in terms of how we manage portfolios and how we run meetings in the office and we will be keeping a close eye on government advice in the coming weeks and months. If the work-from-home order does come, rest assured that we are now incredibly well set up for this and we can mobilise our remote working protocols in less than 24 hours.
Above all, stay safe and try to stay sane in this rather unusual world we are living in.
Yours sincerely
Matthew Smith, Managing Director
