I attended an investment outlook webinar today with Investec. The focus was on what fund managers believe will be the shape of the recovery so I thought I would summarise their opinions with you.
There are several recovery ‘shapes’ that we see after a crisis – you can read about several of them in this link https://en.wikipedia.org/wiki/Recession_shapes .
The fund managers at Investec feel the most likely outcome is a mid – U shaped recovery with an estimated 18 months before markets return to the Feb 2020 highs. The average bear market lasts around 13 months, so a recovery time of around 18 months does feel sensible when we consider that the March 2020 drop was comparatively severe.
The potential shape of the Covid Recovery
This opinion has been formed by their experience together with running various algorithms through software that uses historic and stochastic modelling of multiple scenario’s. Whilst the recent crash was traumatic, they feel it is only temporary and, whilst there is still a lot of Covid-19 water to pass under the bridge there is a general case for being ‘carefully optimistic’.
Obviously, these are just one companies’ fund manager opinions. They may be right…but they may be wrong. I just hought I’d share this information with you.
Have a lovely Bank Holiday weekend
Brian
