Welcome to the last investor update of 2020. November saw global stocks surge as markets reacted to increased certainty on two things: vaccine progress and the US election. Read on to see what happened and what it all means for your investments.
So, what happened in the markets last month?
- On November 7th, after days of intense counting across the country, President-Elect Joe Biden was officially confirmed as the next President of the United States.
- Leading Coronavirus vaccine developers including Pfizer-BioNTech, Moderna and Oxford-AstraZeneca published promising results from Phrase 3 trials on the effectiveness of their respective vaccines. The UK became the first country to approve the distribution of the Pfizer-BioNTech vaccine with the EU and US anticipated to follow suit shortly.
- China's economy continued to show strong signs of recovery from the global pandemic with the country's factory activity reaching a three-year high in November.
- Negotiators from the UK and EU continued to work towards signing a deal before the end of year deadline. Remaining key issues include fishing rights and the role of state aid to companies.
And how are investments performing?
November was a month of record-setting for stock indexes globally.
- The FTSE 100, tracking the top 100 publicly traded companies in the UK, grew in value by 12.4% making it the best month for the index since 1989.
- The Dow Jones, tracking 30 large publicly traded companies in the US, reached 30,000 points (an explainer on what this means) in November safely securing its best monthly performance since 1987.
- The MSCI Europe Index, tracking large- and mid-cap companies across 15 developed markets, rose by 14.2%.
At Wealthsimple all our portfolios enjoyed healthy returns that reflected the growth we saw in markets. Our conservative portfolios, with lower exposure to equity markets, saw 3.6% growth, while our balanced and growth portfolios, with higher exposure, saw 7.3% and 10.6% growth, respectively.
Lastly, what does all this mean for me and my money?
No one can deny it's been a weird year. And stock market performance has been no different. You'd be hard pressed to find an analyst who correctly predicted the huge swings we've seen - from March's market downturn to April's rally and now November's surge. As we head into the final stretch of 2020 we're starting to hear the predictions roll in on what 2021 will have in store for the economy.
So what's in Wealthsimple's forecast? The stock market will go up. Or it will go down. In the short term it's hard to predict what markets will do but the good news is that history has shown us that markets are expected to go up in the long run.
Predictions will come and go but contributing regularly, tuning out the daily headlines and sticking to your plan will always give you a better chance of securing the financial future you want. And make sure to check-in with your overall finances regularly.
Thanks for staying the course with us and remember, we're always here to help. Email email@example.com or book a call with a member of our investment team here.