Friday Highlight  

How investors are navigating the UK’s transition out of lockdown

Gold, for example, surpassed $2,000 per ounce in August for the first time in history.

Although this rate of value growth has slowed in recent weeks, its spot price is still 30 per cent more than it was at the beginning of 2020.

With the US presidential election and Brexit on the horizon, some predict that the associated uncertainty will fuel a second surge in demand for this precious metal, driving its value close to $2,500 by the end of the year.

Among the unprecedented levels of political and economic uncertainty there are always opportunities for investors and traders to achieve positive returns on investment.

The key is finding the asset classes that are able to walk the line between returns and security, as well as identifying the right time to invest.

While cash savings undoubtedly provide the security that investors are seeking, the total value of their money in cash savings is set to decrease in the long-term in this low interest rate environment. 

Looking ahead

Based on what I have been witnessing in recent weeks, investors are hoping that the forecasts for a V-shaped recovery will remain in place; based on upcoming vaccine hopes.

There are a number of hopeful candidates in the development pipeline and one or more of these could help re-establish social norms. 

The issue, however, is that this exact hesitancy regarding investing and spending will only lessen the rate of economic recovery, as markets require the financial stimulus needed to help facilitate a post-pandemic resurgence in activity.

Here we suddenly find ourselves in a catch-22 situation. 

Looking ahead, there seems to be two set outcomes.

The first is a decline in Covid-19 cases, followed by an economic downturn as the market naturally corrects itself, itself followed by a return to relative economic normality.

In the second, a new spike in cases and the reintroduction of more strict lockdown measures delays a recovery for the foreseeable future.

Currently, it looks as though the first of these scenarios is playing out, but one cannot be entirely sure just yet; especially with the chance that a vaccine enters into the narrative and provides new confidence for a return to confident growth.

Erring on the side of caution will remain a common strategy for most.

However, in these uncertain times, investors should always consider all the opportunities available to themselves instead of merely locking up their assets in cash savings.

Doing so may risk the long-term value of their portfolio and could even potentially further delay the UK’s economic recovery.

A commodity like copper, which will play a critical part in the new green technology revolution, offers a good medium to long term bullish outlook for those looking for potential winners in a new age of digitisation and renewable energy.