Holly's Blog: Bad cats, UK bears and a snoop at what you're all up to
By Mike Narouei, Content Producer at Boring Money
22 May, 2020
A quick look at the markets, some thoughts from our readers, and more mad lockdown stories from Holly Mackay.
Hellooooo out there – how are you coping with Week 395 of Lockdown? Achieved those targets? Read Dostoevsky? Fluent in Italian? Ripped abs? Or sucking back the ever-earlier vino with a shocking hairstyle and questionable personal hygiene?
One of my challenges was to grow our own vegetables and create a mini pastoral haven with happy children who would plead for more vegetables as they read their Bibles. We bought a ‘wall hugger’, filled it with compost and got the seeds. At which point the cat was seen, inspecting the new addition with approval, digging a hole, having a triumphant wee and I swear she uncurled her middle claw and stuck it up at me. Mrs Slocombe would have had a fit.
To markets. What’s growing in the world of high finance? Not much. For the last 6 weeks the FTSE 100 has been trundling along in a band between about 5,700 and 6,000 – in other words, not moving around that much. That band is between about 20% and 24% lower than things were at the start of the year.
But actually very few of us are in UK-only investments – we tend to have a mixed bag which has dulled the pain somewhat.
You’ve told us that you feel collectively more pessimistic about the UK economy than you did at the end of March.
When we asked last week, 67% of you thought the UK economy would get worse between now and the end of 2020, compared to 52% back in March. But you’re slightly more positive (or less negative) on the outlook for the FTSE 100 – just 37% of you think the FTSE will fall by more than 5% over the next four months, compared to 51% who thought this back in March. Views are polarised.
“Much fallout from the pandemic is yet to be realised, particularly if there is another outbreak after lockdown relaxes.”
“Most of the downside is already priced in. Some businesses will collapse further, but others have fallen too far e.g. airlines.”
However amidst the uncertainty, many of you have been buying. 54% said you planned to buy more back in March – and indeed 48% of you have since done this.
Across the board people have been opening new accounts to buy. The DIY platforms have had a bumper few months in terms of new client numbers and activity. Our data indicates over 240,000 new accounts were opened in the first three months of the year and trading spiked in April. By % increase in clients, Vanguard (https://www.boringmoney.co.uk/isas-pensions/vanguard-investor/), Wealthify (https://www.boringmoney.co.uk/isas-pensions/wealthify/), PensionBee (https://www.boringmoney.co.uk/isas-pensions/pensionbee/) and AJ Bell (https://www.boringmoney.co.uk/isas-pensions/aj-bell-youinvest/) are amongst the fastest growers.
What are you buying?
The weekend after markets crashed, 34% said you would look to ‘buy the dip’ using low-cost trackers and global funds. A smaller 26% wanted to bargain hunt and cherry pick regions, sectors and individual shares.
Two months on and what you have actually done is more evenly split between the two. Half of those buying have played it safer with trackers and diversified funds. Others have been bargain hunting, mentioning supermarkets, healthcare, pharma and tech in particular. One of my favourite readers with nerves of steel bought EasyJet a month ago – yowzers. That’s either genius or unhinged.
“Don’t let a good crisis go to waste. There is never a bad time to buy a good stock at a sale price.”
“I believe balanced is the best place to be currently and my strategy is to drip feed whatever cash I have spare at the end of the month into a global balanced fund and a UK one.”
“I think the market has further to fall and then will hopefully make some purchases.”
As we head into a hopefully sunny long weekend, I leave you with a final collection of views from our readers. Thanks to all of you who take the time to tell us what you’re thinking – it’s much appreciated.
“I’m expecting a rollercoaster ride over the next few months.”
“The only thing we can be sure about is that uncertainty will continue. Life has little purpose apart from staying alive (I feel a song coming on).”
“It is like 2008 but with more teeth.”
“In the words of D:Ream 'things can only get better, yes they can'."
Always one to try and find a silver lining, I leave you for the long weekend in high spirits because my green wheelie bin was emptied today!!!! YAY!!!!!! In May 2020, that is as exciting as dinner in the South of France with Brad Pitt (as he looked in the 90s in Thelma and Louise). Just to extend the fantasy, imagine if Brad Pitt would actually cut the grass and lop the trees and push the green wheelie bin to the end of the drive. Putting a shelf up on the way…… Oooh stop it!!! I’ve come over all funny.
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