Back in January of this year, before as a result of a surge in cases the WHO officially recognised the spread of COVID-19 as a pandemic in mid-March 2020, I answered the question on "Where To Invest Your Money in 2020?" by highlighting Ocado, Morgan Sindall Group, Forterra plc, Countryside Properties and The Royal Dutch Shell ‘B’ shares.
Since then the following has happened to these picks compared to the FTSE 100, Nasdaq Composite Index and Standard & Poor 500 Index as a whole:
| January | Mid-February | October | |
|---|---|---|---|
| OCDO | 1,259 | 1,135.5 | 2,383 |
| MGNS | 1,620 | 1,970 | 1,209 |
| FORT | 357 | 371.5 | 191.8 |
| CSP | 468.2 | 540.5 | 369.6 |
| RDSB | 2,258.5 | 1,886.4 | 964.7 |
| FTSE 100 | 7,604.3 | 7,403.92 | 6,013.69 |
| Nasdaq Comp | 9.020.77 | 6.879.52 (mid-March) | 11,420.98 |
| S&P | 3,234.85 | 2,237.40 (mid-March) | 3,477.13 |
So, despite the dismal performance of RDSB (I did warn that it was one for the long-haul!) and the impact of COVID worldwide I’m not too disappointed in my January picks as they seem to have - bar one - weathered the storm quite well and are starting to rise again, just in time for a second hit, if it is to come. Without the Covid-19 pandemic in all probability they all, again bar one, would have seen a good return on investment.
What is also of significance to mention is that it is not so much as the first wave or the second wave but the various governments’ reaction to these occurrences. This is highlighted in the FTSE 100, the UK’s leading index, which dropped below 5,000 points on 23 March, the day the UK lockdown was announced.
So where to now - the tech and healthcare related stocks seem the obvious choice but are they really the best options?
On the plus side having experienced a first wave, if a second wave does come about then it is likely to be less severe than the first. The UK is better prepared from a medical, technological, and social standpoint with the stuttering testing and tracing system to seeing the general population taking precautions such as mask wearing, frequent hand-washing and social distancing.
We also know that the surviving businesses are now better prepared as they have as a matter of course had to adapt and innovate in this new environment, in ways that they probably wouldn’t have even considered, in order to carry on their work practices. In many cases we are seeing trends, such as more working remotely and from home that will no doubt be carried forward when all of this is behind us.
From an investor’s perspective, those who have been watching the markets closely through these turbulent months will have realised the need to diversify beyond the UK. We have seen a reasonable upturn in the FTSE over the last few months but it would be a stretch to call it a recovery as it is still along way adrift from the highs of 2019. However, if you look across the water to the main US financial markets we have witnessed the Nasdaq and the S&P500 starting to soar again.
So to maintain a balanced portfolio, for now at least, it would be wise to have a selection of US stocks with the top giants of:
- Amazon which was at $1,874 in January and is now at $3,342,
- Facebook which was at $209 in January and is now at $267,
- Apple which was at $74 in January and is now at $120,
- Netflix which was at $329 in January and is now at $539,
- Google which was at $20 in January and is now at $37,
- PayPal which was at $108 in January and is now at $197 all being the obvious choices here.
Obviously and simultaneously the UK government wants people to get back to work as soon as possible in order to get the economy back to a level that in the short term is at the very least approaching normal. So there is light this side of the Atlantic too, you just have to tread very carefully and pick after that double-dose of diligence.
So in addition to my US shares, I have kept my stake in:
-
Ocado (LSE:OCD) (as shown in the chart above) and then further invested in June in the following there options,
-
Fever-Tree (LSE:FVR) which started the year at 2,091 GBX then fell to a low of 90 GBX before rising again to a current value of 2,170 GBX;
-
Anglo American (LSE:AAL) AAL which started the year at 2,202 GBX then fell to a low of 1,091 GBX before rising again to a current value of 1,945 GBX;
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Scottish Mortgage Investment Trust (LSE:SMT) SMT which started the year at 586 GBX then fell to a low of 546 GBX before rising again to a current value of 1,047 GBX - all of which are tracking favourably to date.
So that’s where my money is right now - where are you putting yours?