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Investing predictions panel
How does a panel experts believe the markets and popular assets will perform over the rest of 2020?
2020 has been a tumultuous year for investors and there could be more volatility in store before the year ends. Many retail investors are wondering how the markets, specific industries and assets will react to the major events of 2020 such as the US presidential election, Brexit and the coronavirus pandemic.
To help get some thoughts on these issues, we brought together a global panel of 33 investing experts, to give a range of thoughts and predictions on markets and assets around the world.
Meet our panel
Will share trading and investing apps dominate?
With share trading and investing apps (e.g. Trading 212, eToro, Hargreaves Lansdown etc) seeing an explosion in popularity in the UK, we asked our panel if apps will become the main investment channel for retail investors, and if so, when that will be.
The majority of the panel (59%) expects apps to dominate the retail investor market although some panellists think they will be adopted faster than others. 16% think it will take apps a decade to dominate, 41% think it will take 5 years and just 3% think it will happen in less than 12 months.
I believe the future of retail investing is bright. The trend to democratize the investing will continue, giving the retail investor more opportunities to participate in an educated way.”
Most promising investments
When asked what type of asset shows the most promise for investors for the remainder of 2020, stocks were the unanimous pick, with almost two-thirds (63%) of the panel choosing this. Gold was the second most popular option, with 17% of the panel going for this. Despite Bitcoin’s current surge, cryptocurrency was only chosen by 7%, as was cash and bonds.
The FTSE is still significantly down on the year, but the upside of this is that the panel believes there is more room for it to grow than the US markets in 2020. The panel’s average price prediction for the end of 2020 is 5,872, which would be an increase of 5% from the price at the end of October.
S&P 500 and Nasdaq
The US markets are still expected to rise though, albeit by a smaller amount. Despite already being above pre-pandemic levels, the panel predicts the S&P 500 and the Nasdaq to hit 3,393 and 11,137 respectively, which would be an increase of 3.73% and 1.94%.
They did sound a note of caution though:
Stimulus has acted as a drug to the stock markets. However, once the stimulus measures are eased, the rehab process will be very painful.”
Airlines investing predictions
It has been a particularly tough year for airlines and finder.com’s panel of experts doesn’t see this changing any time soon. When asked if it was a good time to buy airline stocks, 3 in 5 said no (61%), although 39% think it is a good time.
Oil investing predictions
The picture on oil shares is a bit more opaque. While a quarter of the panel (26%) predict that share prices will sink lower, 10% think they will rise from current levels. The majority of the panel (61%) believe that prices will remain at current levels for the rest of 2020.
|Response||% of panellists|
|Remain at current level||61%|
Gold investing predictions
An overwhelming majority of the panel (63%) think that gold prices will hold at their current level of around US$1,800/oz until the end of the year. However, almost a third (30%) predict a sharp rise in the price of gold before the clocks tick over to 2021, expecting gold prices to rise by about 39% to be worth around US$2,500/oz. A further 4% think prices could reach around US$3,000/oz before the year is out. Only one panellist thought it would drop significantly, to $1,500.
Inflation is going higher, which the Fed has noted is acceptable. Additionally, the dollar is going lower. Where else can investors put their cash? Gold (and real estate) are the obvious choices for investors to put their cash to fight inflation and a falling dollar.”
Joe Biden predicted to be better for global markets
The US election result is still in the balance and the panel was also split on which president would be better for the global economy. Two-thirds of the panel (65%) said Biden, although the remaining third (35%) thought Donald Trump. The result will no doubt have a big impact on the markets, but James Gauthier, chief investment officer at Justwealth Financial Inc. sounded a note of caution that “While stimulus and the election are seeming to have a greater impact currently on the US stock market, neither factor will matter if the COVID-19 problem is not solved.”
Heranya Capital Advisors founder Petri Redelinghuys said the markets could react poorly if Trump loses outright.
“I personally do not think that Trump is going to be a force for good in the world, but I do think that the market will react very poorly if either he loses outright or the election is contested. Thus, I suppose, Trump is good for markets,” he said.
Glacier head of research Francis Marais thinks that in the short term, Trump would be the better option for global markets. However, he notes that there are other factors we need to consider that may not be addressed if Trump takes the seat yet again, such as environmental, social, political and trade risks.
Meanwhile, Bell Direct market analyst Jessica Amir thinks a Biden win could result in some economic bumps.
“…the Democratic party will look to further the healthcare reform following on from Obamacare. This is likely to be detrimental to US healthcare stocks, as the focus will be on providing public health care and moving people to the government payment option. The move away from commercial/private health care will reduce the profitability of the private sector,” she said.
However, Amir notes that the concern surrounding the US elections are not focused on who will win the presidential race. Rather, the outcome of the markets depends on who will win the senate and what legislations they will enact.
“There are risks around the upcoming US election, and with European COVID-19 cases spiking. But this appears manageable, given the momentum behind economic growth and knowing that economic cycles drive markets, not elections,” she said.
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