After the whirlwind of last year, uncertainty remains the new normal in 2021 as investors seek to steer a course through these uncharted waters.
Millennials are starting to understand the importance of investing for the long-term, but are still prone to riskier strategies than more traditional investors.
Iona Bain, founder of Young Money and author of Own It!, told The Scotsman’s online investment conference that online free trading platforms could be a force for good.
However, she added: “The brave new world comes with a risk and many people are drifting towards the big tech giants without diversifying properly. They are egged on by apps and they tend to follow the crowd.
“They are not always going in with their eyes open, not doing their homework and instead might follow influencers and trends. More experienced investors are steadier and more cautious.”
However, she felt that the rapid rise and fall in GameStop shares – which was fuelled by younger online investors – had been a very good illustration of what could go wrong and that many might look towards more “boring:” strategies as a result.
Zehrid Osmani, of Martin Currie Global Portfolio Trust, said the well-diversified and high conviction long-term investment principles of the Trust lasted throughout the pandemic. He stressed the importance of ESG (Environmental, Social and Governance) factors in investing and said: “You cannot have a viable business model in the long-term unless you have a real focus on sustainability.”
David Coombs, Head of Multi-Asset Investment at Rathbones, suggested investors should look closely at the healthcare sector – and especially those businesses which offered medical technology solutions which would save the government money.
Asked for one tip for investors, Coombs advised them to focus on simplicity and quality – and to keep cash in arrears.
Iona Bain urged investors to diversify and look at the long-term – and not be afraid to forget about their portfolio for a while and stop worrying that they were missing out.
Zehrid Osmani agreed that a long-term approach was crucial, with an emphasis on developing a genuinely sustainable portfolio.