The year 2020 was an extraordinary year in all aspects. And it was a year of ups and downs on the stock market as well. In this blog we’ll provide you with a brief overview of what happened on the stock market last year and hence with your pension capital. Because, spoiler alert… despite everything, 2020 will go down in the books as a good investment year.
The effect of the coronavirus on the stock market
The outbreak of the COVID-19 virus is clearly reflected in the investment returns. The lockdowns that were imposed to a greater or lesser degree significantly affected investor confidence across the globe, resulting in a substantial drop in returns. After intervention from governments and central banks, we fortunately saw a recovery in Q2. Returns continued to increase even as infections rose throughout the world and during the second wave of infections in Europe.
The US election
The second half of the year was focused primarily on the US presidential election. Polls indicated that Joe Biden would defeat sitting president Donald Trump. But there was much uncertainty about the incumbent’s reaction, which turned out to be well warranted. The election result was more suspenseful than ever before. Still, despite everything, investments did well. Additional stock market recovery took place when it became clear that Biden had definitively won.
Vaccines give rise to further recovery
The recovery was quickly topped by the positive news about vaccines that were being developed by several companies. This compensated for the negative returns in Q1 before the end of the year. Take a look at the returns of the BeFrank lifecycles over the year 2020.
Nice results, but the future remains uncertain
All in all, 2020 will go down in the books as a good investment year. But we don’t yet know what the future will bring regarding the market. The start of vaccination is, of course, good news for us and hence for the economy. But we still don’t know exactly just how great the true damage is. This is sure to become clearer with time. Only then we will be able to see whether the markets have truly weathered the impact of the COVID-19 pandemic.
New: we will also invest in mortgages starting in 2021
Did you choose an active or passive lifecycle for your pension scheme with us? If so, the pension capital will also be invested in mortgages starting this year. That’s good news, because adding mortgages will increase our long-term returns without being associated with additional risk.
Always an eye on investment returns
Did you know that at BeFrank participants can keep track of their investment returns 24/7? It’s super easy with our app and on the personal pension page. Very convenient!