One of the things we get up to at Boring Money is regular, large quantitative surveys to have a snoop into what regular people are doing and planning with their money. We check in every three months. How is the mood out there? Is Handforth Parish Council the only place where people are losing the plot?
Here are some key facts and take outs. Now PAY ATTENTION!!! Read Them And Understand Them!
First – sentiment is low. People are down on the UK economy and much more optimistic about the global economy. There’s a definite sense that the grass in greener on the other side (of the oceans). 61% of investors expect the UK economy to get worse in 2021 – it was just 46% in 2020.
Second – sustainable investing. Appetite is temporarily muted. I guess when we are fearful about our health and jobs, it’s natural that our horizons move inwards and we don’t have the capacity for more global, long-term thoughts.
Back in September, we asked investors what their priorities were when it came to the environment, broader sustainability concerns and of course, making money.
Most people fall into what we call the “Moderate Greens” camp – interested to make their money do more to back sustainable companies, but with the core focus still on making the best possible returns. 4 in 10 adults fell into this group. Just 9% of people classified themselves in the “Pure Returns” camp – that is, solely interested in making as much money as possible with no regard to the type of companies that they invested in.
Just 4 months on, there has been a significant shift and 23% of investors now classify themselves as Pure Returns. Across the board, reported interest in sustainable investing has waned. Check out what sort of investor you are with our short quiz.
Longer-term I think we will see the erosion of assumptions that ‘doing the right thing’ equates to making less money. This morning I had a quick squizz at robo adviser Nutmeg. Looking at their medium 5/10 risk profile, over the last 12 months the ‘socially responsible’ variant has returned 8.8%. The traditional portfolio has returned 6.6%. Of course this is just one example BUT I no longer expect to see a ‘good’ portfolio perform worse. Have a look at our Sustainable Savers pages for fund picks from research firm Morningstar, ready-made sustainable portfolios and more.
Third –confidence. An unusually high 40% of all investors rate their confidence in making the right investment decisions as a low 5 or less out of 10. I can relate to that. It feels a bit like sitting on the deck of a boat, knowing that Jaws is out there somewhere. We’re just not quite sure how far away. Or which boat he will bite! (Tip? Diversify diversify diversify).
And finally, here are a handful of comments which illustrate what British people are saying when we ask them about their financial priorities:
More cheerful glimmers of hope from the Bank of England this week who forecast better times ahead. Once we get past the Spring and anticipated falls of 4.2% in the economy, the Guv’nor – Andrew Bailey – thinks we will see a sustained recovery, partly fuelled by those white collar workers who have been sitting at home, squirreling cash into savings accounts.
And global stock markets continue to climb – the FTSE, Nasdaq 100 and S&P 500 are all up this week.
Over and out for another week. Poor old Jackie Weaver. Hope she’s having a nice sherry with someone more polite than most of her neighbours. Now wouldn’t it be lovely to offer her a guest spot as Speaker in the upcoming Budget on 3rd March? I’d love to see her bring Boris to order……