Stressed and Confused? Turn Off the News

Editor's Views: Why investors should embrace uncertainty, the search for the next Tesla or Amazon and the case for renting your house rather than buying

Holly Black 6 November, 2020 | 10:52AM
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If one thing is certain in 2020, it’s that nothing is certain. Who will be the next US president? Are we headed for a double-dip recession? Will I ever be allowed to leave my house again? Uncertainty abounds.  

When things feel out of control, we naturally feel a tendency to do something. Anything. For you, that might be hoarding toilet rolls and bags of flour, or it might be logging into your investment account to tinker. I would encourage you to do neither.  

We’ve been speaking to a lot of people this week about what might come next, and our analysts have been number-crunching and data-running and doing all those other clever things that analysts do. What’s the conclusion? You can’t predict the unpredictable, so don’t bother trying.  

Turn off the news and read a book or phone a mate for a chat. Or, if you’re like one of my friends, cheer yourself up by putting up the Christmas lights obscenely early. Because, honestly? It’s all just noise.  

Rather than getting jittery about all the uncertainty, I’ve decided to embrace it – or, at the very least, ignore it and get on with those things in life I can control. And if that doesn’t work, I might just get the Christmas lights out.  

Avoid the Obvious

I love a good investment theme (though I’m conscious that a great story doesn’t always mean a great investment). The trouble is, by the time most of us have heard about The Next Big Theme, the opportunity to invest in it has probably already passed. Themes in the investment world tend to be dominated by one or two stocks, which everybody flocks to, driving the price up and up and up until… one day it doesn’t.  

Take electric vehicles, for example. Tesla (TSLA) shares have soared on the back of this story. Remote working? Look at what Zoom (ZM) shares have done this year. Online shopping? There’s a lot of us who wish we had a time machine that would take us back to when Amazon (AMZN) first listed so we could be multi-millionaires by now.  

But while these themes may become synonymous with one or two businesses, it doesn’t mean they are the only companies that can help you tap into a trend. Picking the obvious stock is always a risk – it’s likely already expensive, it’s definitely already closely monitored, and it will probably to be the first victim if there’s any change in sentiment. Looking for the less obvious stocks might be a little more work, but really could reap rewards.  

So, I was interested to speak to our analyst Niklas Kammer about payments firms this week. I’m sure I’m not the only person who’s thought: “Man, I should have invested in Visa/Mastercard” when I’ve tapped my plastic to make a contactless purchase in recent months. But it turns out there are a whole host of unseen companies between the shop with the contactless terminal and my card issuer, and according to Morningstar analysts, they’re on an upward trajectory. 

So, I’ve let the cat out of the bag there – the secret is out, and maybe Nexi (NEXI) and Adyen (ADYEN) will be the names on everyone’s lips in months to come when we’re discussing the shift to a cashless society. But for now, I’d argue they’re relatively unheard of among us average Joes, and a great example of how there are always ways to play an investment trend without having to go for the obvious.  

Property Mania

Us Brits are obsessed with property. Rightmove trawling is practically a hobby for a lot of people I know. So, I found the question posed by my colleague Jonas this week fascinating: Is renting throwing money away?  

Across the channel on the continent, renting is frequently the norm. Back in Blighty, there is a belief that owning your own home is the most important thing you can do in life. Now, I’m a homeowner myself so I have clearly bought into this belief to an extent, but one thing I categorically do not believe is the fallacy that your home is an investment. An investment is not something that you live in, and selling an investment should never render you homeless. 

Strangely, the Covid-19 pandemic only seems to have driven the UK housing market even further into bubble territory. Great news if you’re selling, terrible if you’re trying to get a foothold on the ladder. With owning a property out of reach for so many, I wonder whether we might start paying more attention to all the positives that renting has to offer. I certainly would have welcomed having a landlord to come and fix my roof when it leaked a few weeks back! 


The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Holly Black  is Senior Editor,


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