Analysts at Hargreaves Lansdown look at 7 charts covering what’s changed for the markets and personal finances throughout the pandemic and as life returns closer to normal:
- The rise of the retail investor
- Investors are showing more love for UK stocks
- Bitcoin’s rollercoaster ride
- We return to borrowing again
- Real wages are falling at a time of high inflation
- Lockdown savings are being eaten into
- Annuity rates are on the increase
1) The rise of the retail investor
Susannah Streeter, Senior Investment and Markets Analyst at Hargreaves Lansdown:
“The number of retail investors on the HL platform has surged during the pandemic, as people were able to build up piles of savings to invest given that many commuting and socialising costs were slashed. This surge in activity was partly prompted by the early pandemic days of stock market turmoil and the euphoria which erupted after vaccine breakthroughs, as between February 2020 and December 2021, there was a 30% increase in the number of active HL clients.
HL has been targeting new clients with content and support to encourage diversification to help them become better investors with a keen eye on a long term horizon rather than attempting to make short term gains. This campaign has borne fruit for other clients as well, with almost a third of people who joined the platform three years ago with a share purchase, now having diversified to include at least one fund, exchange traded fund or investment trust in their portfolio.”
2) Investors are showing more love for UK stocks
Susannah Streeter, Senior Investment and Markets Analyst at Hargreaves Lansdown:
“The FTSE All Share has regained a vibrancy that was lacking prior to the pandemic, with a pallid tone having blighted the index due to worries about Brexit. Vaccine breakthroughs helped stocks roar back and the trade deal with the European Union gave another positive jolt to the index. It’s risen 44% since the darkest day of the pandemic on the financial markets, when the index dropped to 2837 – its lowest point since June 2012. Shaking off the double shackles of covid and Brexit hasn’t been without its setbacks, while new variants have emerged, and extra trade red tape has proved onerous for many importers and exporters. The index has headed higher on a meandering trajectory, with investors overall showing a lot more love for UK stocks.
But the romance is still lacking for travel and tourism and companies highly reliant on the sector. The shock of the conflict in Ukraine has caused volatility and fresh disruption for airlines, which had already been struggling against ongoing turbulence on their slow flight path to recovery. The valuation of British Airways owner International Consolidated Airlines group is 67% below pre-pandemic levels, weighed down by the baggage of extra debt taken on to try and navigate the crisis, amid worries traveller confidence is being jolted again by war on the doorstep of Europe. SSP, the caterer with outlets across train and air hubs, highly reliant on tourists and commuters is also still suffering from the lack of footfall, with shares still 55% lower than pre-pandemic levels.”
3) Bitcoin’s rollercoaster ride
