Medium Term Investing: Corona Proof your finances

Like many people, I was delighted to hear this week’s new that Pfizer’s coronavirus vaccine has 90% effectiveness; the FTSE jubilantly jumped 5% on hearing the news.  The politicians who are charged with looking after our economy, and the lockdown strategy, were less enthusiastic, pointing out both that the vaccine needs regulatory approval, and that it would take an extended period of time to inoculate a significant proportion of the population. The rhetoric from Boris was clear; warning people not to “rely on this news as a solution” to the pandemic.  In terms of an end to the Covid nightmare, England’s deputy chief medical officer, Prof Jonathan Van-Tam, (who I think we can safely assume is more motivated by scientifically observable truths than political rhetoric) was keen to stress this is no quick fix, saying there would only be a “much better horizon” by the spring.  Indeed, the news that school exams are, now, being cancelled for Summer 2021, and that the furlough scheme will run until March suggests not much will change in the near term. 

It led me to think how difficult it is to make financial decisions currently.  The sensible mantra seems to be: Hope for peace, prepare for war.  Whilst I have previously written about the opportunity in chaos, many are quite rightly focused on wealth preservation. 

In fact, the medium term outlook demands it.  Even if Covid finally disappears in the rear-view mirror we have political uncertainty in the US, and the cluster-bodge that is Brexit. Frankly there’s not many places for cash to hide and wait it out.  Commercial property primarily relies on the strength of our High Street and our need for offices, both of which are at an all time low.  Buy to let property is crippled by 6-month minimum notice periods.  Whilst the stamp duty holiday is providing brief respite, let us not forget that the forecasts for property next year make grim reading – the Bank of England predicting a 16% drop, and CEBR a 14% drop.  The major central banks have printed so much money that inflation can run amok; I also believe the stock market to be artificially propped up by all this nigh-on-free money and due a major correction next year.  

It is difficult to know where to turn, but there a few assets which have strongly beaten the market.  Year to date figures are encouraging on gold (22%) silver (34%), traditionally seen as the “safe havens” in times of downturn.  At Dacxi we have seen a great response to our new product, which provides a bundle of gold, silver, and platinum together in a tokenised form, with an entry level of £200.  Crypto of course continues to do very well, with bitcoin seeing 109% growth, ethereum 254% and litecoin 42% so far this year.

So what are the lessons here?  Diversify.  Preserve the hard earned wealth you’ve got.  Ask yourself one critical question: Can you afford not to? 

Adventures of a unicorn is a business blog documenting the daily life of tech startup in hypergrowth.  Dacxi is a unique crypto business in the crowd lending space.  

All views expressed in this blog are my own and do not represent the opinions of any entity with which I have been, am now or will be affiliated.

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