As the clocks struck midnight on the last day of the year locked-down & subdued party-goers toasted the end to the annus horribilis that was 2020! Expectations across the world were higher than ever that the New Year would arrive with a renewed sense of hope for better things to come.

Unfortunately, the mere ticking of a clock or rolling over of a date do not necessarily reset the tables and usher in a different time. Reality sticks around for longer and is a lot like the launch of the new iPhone a few years back… expecting the iPhone 7 and only getting the iPhone 6S – much of the same, very little difference, only rebranded with a new name!

2020 did end on a positive note, though – at least as far as asset prices go. Markets posted respectable numbers to end off a challenging year with gains exceeding the March drawdowns. The concern being that the performance we have seen is largely thanks to looser monetary policy and stimulus packages rather than markets pricing in a recovery and return to normal. In reality, the true recovery can only come when COVID-19 is well and truly contained and behind us.

Geopolitics and lockdowns continue to dominate the headlines, both locally and abroad – the ‘Blue Wave’ of Joe Biden and the impact this will have on the US; Brexit and its seemingly-endless tentacles affecting the UK and Europe; the direction of interest rates; progress made in vaccinating billions of people; and economic recoveries post-COVID will be the obvious drivers of markets and assets in the coming months and quarters.

On a positive note, markets across the board have already posted strong gains early in the New Year, even exceeding some of the total returns we saw for the whole year of 2020, and we hope that this continues well beyond the first two weeks of 2021! After all we’ve endured, we certainly deserve that!

On behalf of us all at Octagon Financial, I wish you and your loved ones a blessed start to 2021 – may you all stay safe and protected through the 2^nd wave affecting us, and may you enjoy good health and happiness throughout this year and beyond!

Steve Crouse
Chief Investment Officer and Senior Adviser