New variants of coronavirus are emerging almost everywhere around the world and infection rates have risen sharply again in recent weeks.
Many countries are announcing new, much tighter lockdown measures.
More and more vaccines are being approved. Vaccination has started, but may not get up to speed until the second quarter. Both the logistical challenge and producing sufficient doses are creating a bottleneck.
Lockdowns are again paralysing most of the leisure sector. Business confidence in the service sectors is declining sharply. On the other hand, the industrial sectors would appear to be suffering little inconvenience.
The rapid recovery in the third quarter of 2020 suggests that the economy will bounce back when mobility restrictions are eased again.
A broad range of support measures in Europe and in the US (after the Democrats gained control of the Senate) will – in tandem with very accommodative monetary policy – underpin the recovery.
Rising levels of infections have not affected stock markets in recent weeks. Even the 11th-hour Brexit deal and turbulent last days of the Trump administration failed to disrupt the markets.
Volatility on the financial markets remains a possibility. Even so, we continue to prepare our portfolios for the return to a normal situation following the vaccination rounds.
Within the stock component, we are opting mainly for sectors that will benefit from the economic recovery. We were particularly interested in the consumer sector, which includes growth segments like e-commerce, and in the leisure sector, where the recovery has yet to begin.
In the bond component, we are opting for corporate bonds and bonds issued by emerging market countries.
Besides this long-term vision, protection and trends on the financial markets are important aspects too. Your personal investment may have a different composition that takes account of your comfortzone.