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Year End 2020 Review and Outlook
I guess we all are happy that we will soon see the back of this
Queen Elizabeth II called 1992 and the year of the Pandemic merits
this description even more.
Surprisingly it is here in the UK that rapid progress has been made
with respect to mass vaccinations. Letís hope that this will
also facilitate the development of herd immunity among the less
Despite all the false starts and dashed hopes the Real Estate
markets all over the world were more than resilient. Alternatives to
investment in the asset class all offer exceedingly miserable
returns and until QE is reversed in a meaningful way the outlook for
Property should stay positive.
Retail and Office will be to sectors to keep a close watch on, and
Logistics may become overly stretched as the online shopping
trend may slow down or even come to a halt..
One word of caution:
Headline returns of most assets are at eye-watering levels. This may
be justified in the long run if authorities continue monetary
expansion a outrance. But one should not forget depreciation.
I have seen many an office building going up in the City of London
only to be pulled down again after a mere 20 years. Inflation
prevented any losses on the investment in these cases. But should
one rely on this to continue? And how many investors take the need
for 2, 3 or 5 percent depreciation into their return projections?
this word of caution I want to wish all of you, current and
(hopefully) prospective partners and clients a Merry Christmas and a
Year End 2019 Review and Outlook
Despite all the
uncertainties that we experienced recently the Outlook for 2020 is
quite benign. Shall one believe the consensus, or try to second
guess it and be contrarian, and then again be on the other side of
the contrarians? The Macro game could go on and on and I think it is
best to concentrate on good selection of individual investments, be
they shares, bond issues or properties.
Fees are under pressure in the Institutional Investment world as
well as in Private Banking. On the other hand the need for good
investment advice is only getting more pressing as populations age,
other countries become more prosperous and overall wealth and
savings increase. So while the pressure to lower fees is there one
has to be realistic and accept that even lower fees allow a good
living for most market participants.
growing acceptance and use of passive investment tools the other
major development during the past year was the growing interest in
Impact Investing (including ESG, SRI, Social Investing as the
various strains are known for). I think this might be the current
fashion but it remains to be seen if these investments can really
provide the returns that end investors and savers expect and need to
provide for their retirement
I conducted my first major search for an ESG/Impact Fund Manager in
2000. At that time this was a very marginal part of the Investment
universe but even then I quickly realized that EVERY investment has
a relevant angle and as a consequence the first list of possible
candidates contained more than 300 candidates. In that bygone area
the real difficulty was to find someone who would even consider
looking at this still quite new specialization!
The real way to tackle Climate Change or Social Problems should
still be primarily the task of elected governments and one can only
hope that regular progress is made on this front.