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. And that was good news for your pension.
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.
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.
There will always be market fluctuations
One thing we do know is that there will always be market fluctuations. Also, it’s important to keep a long-term perspective in mind. We formulated BeFrank’s investment principles for both good and bad times, so they remain applicable even during this strange period. Keeping a cool head is the best that we can do.
You can always keep an eye on your investment returns
Did you know that at BeFrank you can keep track of your investment returns 24/7? It’s super easy with our app and on your personal pension page. Very convenient! Bur remember, if you see a drop in returns be sure to keep a long-term perspective and a cool head.
New: we will also invest in mortgages starting in 2021
Did you choose an active or passive form of investment with us? If so, your 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.
Good to know
At BeFrank, we invest your pension capital on a diversified basis. We invest throughout the world in numerous companies, sectors and investment categories such as equities and bonds. This diversification limits your risk. We automatically lower the risk associated with your pension capital investments as you get older. We then put your money in less risky investments that will be less affected by sudden price drops. Will you retire within a year and want to incur less risk? You have a few options.
You are in control of your pension
At BeFrank, you decide how much risk you are willing to run with your pension investments and how we will invest your pension capital. The choice is yours. Use our Profile selector to easily determine which model suits you. Take control of your pension today.