New York Stock Exchange

8 Ways the Financial Markets Might Change in 2020

The political, economic and social problems that very economy faces are sure to affect its growth at every level.

The UK faced its biggest financial crash in 2008, which took a deepening and devastating toll on the economy.

With no quick recovery, despite the government using every possible method to turn this financial crash around, this affected the growth of UK’s economy for the next years to come.

And, as it affected the economy, it also affected the finance markets.

The stock market fell, people lost their jobs and savings started diminishing.

Now, in 2020, we are currently facing the devastating impact of the Covid 19 on the entire world, the world economy and the stock market.

As this virus takes its toll on the health of the people, it is also taking its toll on the finance market.

Steeping back to the previous year, 2019, the uncertainty of Brexit or no-Brexit also took its toll on the financial market and the real estate market.

Be it estate agents in Manchester or real estate agents in Buckingham, they can all agree that the uncertainty around Brexit certainly affected the number of houses that were being sold in the real estate market. Why?

Because people did not want to take the risk of parking their money in a bad investment.

Similarly, people were not very keen on keeping their money in the stock market because of the shaky economy and the uncertainty in regard to the future.

After all, it takes a lot of factors to affect the macro economy of a country.

With the new election results, the Brexit decision and the currently devastating Covid 19 virus, the financial market is sure to be affected.

Coming back to the future, here are some ways that the finance market might change in the UK in 2020.

10% Correction

With Boris Johnson leading the UK out of the EU on 31 January, with the upcoming US presidential elections in November 2020 and with the current trade tensions, 2020 is sure to be an interesting year.

However, according to some analysts, the stock market will see a 10 per cent correction, at least.

Boost From Foreign Investments

Due to Brexit, this is a great time to buy stocks in the UK since the prices are low.

With the certainty that has been brought about by Brexit and the increased confidence of overseas buyers and overseas investors will give the domestic assets the boost they require.

UK Currency

Increase in Pound Sterling

Since the pound is currently at a low rate, this is a great time to secure your investment.

After the general election, the Conservative party won with a strong majority which was a great sign for the UK economy and the financial markets.

As the politicians promise to come into the upcoming parliament elections with a turbo-charge and billions of pounds, the pound will definitely rise. And as the pound rises, the stock market will too.

No Change in Investment

As per research, around 50 per cent of the current investors say that they will continue to invest the same amount as they did previously.

However, it is likely that these investors diversify their portfolios and start investing in the Asian and American markets, not only the UK market.

Renewable Energy Becomes Most Loved Investment

While technology is one of the most common stocks among investors, as well as utilities and infrastructure, which basically includes big companies and development companies, there is a new stock that is becoming a new favourite.

An investment in renewable energy is the new top pick among affluent investors in 2020.

Green energy is the new change that will take over the finance market by a storm.

FTSE Will Hit Big Numbers

With the FTSE hitting approx 7900 in May 2018 and around 7600 in December 2018, there might be a possibility that it will hit the high mark in 2020.

Experts and analysts are predicting that there might be a possibility that the FTSE will hit the 8000 benchmarks in 2020.

However, it is also important to note there are a certain few that are predicting it might drop lower than 6500.

Growth in the Stock Market

Strategists and analysts at Goldman Sachs predict that 2020 will be the year of the growth of the UK stock market.

With the increased political clarity coupled with the labour market’s resilience, there could be a visible and impactful growth in the finance market of the UK in 2020.

Huge Dividend Payouts

Great news for investors, there will be huge dividend payouts in 2020!

FTSE will continue to give huge amounts of cash to investors.

Considering the number was around £90 billion last year, this year, the number is expected to rise.

Clearly, 2020 is a great time to be a dividend investor!