The· FTSE 100 The index has increased by more than 1,000 points in the last two months, following the success of the Covid-19 vaccine and the politically stable election results in the United States, the world’s largest economy.
Indeed, these are great benefits.
But I’m still blazing from the 2020 experience, so I’m plagued by the question – can the stock market recovery continue? This question is becoming more important because there are certainly risks to the recovery of the stock market.
But in balance, I think the odds at this point are in favor of the continued rise in the FTSE 100.
There are three reasons:
# 1. Brexit-led stability
The UK and the EU were able to conclude a free trade agreement in time. Otherwise, Brexit without trading would have started on January 1st. This would have made a chaotic beginning until 2021 if neither side could see them together.
The threat is now gone.
And as the FTSE 100 Index approaches 7,000, it is manifesting itself in investor confidence. Brexit uncertainty has left the FTSE 100 Index in a volatile state for many years. I think there is interest from many tired investors who will continue to push the UK stock market from here.
Indeed, some aspects, such as the financial services sector, will be more clearly cold. But so far, there seems to be more positive investor perceptions from Brexit trading than not.
# 2.Vaccine deployment supports the FTSE 100 rally
Britain is in the midst of yet another blockade, but there is a lot of hope. Vaccine deployment has begun.A few 1.5 million people in the UK It has already been vaccinated and the number is targeted to increase to 15 million by mid-February. That will be over 20% of the country’s population.
Both Pfizer-BioNTech And AstraZeneca-University of Oxford Jab has been administered and there is a good chance that Covid-19 can be controlled much more strongly. This hope is sufficient to continue pushing the stock market despite the emergence of coronavirus variants.
# 3.New US President
Finally, the impact of the United States on the global financial system should always be kept in mind. And a lot is happening there. In any case, 2020 was an exceptional year. But that may have been even more so for the United States, as the results of the US general election are uncertain.
Election results were in line with vaccine deployments, and it was nearly impossible to see how much the results helped the stock market recover. What we know is that the vaccine rally probably didn’t pull back either.
Now that Biden has become president, if there is still anxiety, it’s gone. This is only valid for financial markets.
In short, I can agree that 2021 has a better outlook than 2020. It improves stability and improves your ability to deal with what comes next.
In the spirit of what 2020 taught, I will focus on long-term investment. Because who knows what will happen in the short term!This is Some stocks that are willing to buy and hold until at least 2025..
Manika Premusin I own a stake in AstraZeneca. The Motley Fool UK does not have a position in any of the listed shares. The views expressed about the companies mentioned in this article are those of the author and may differ from the official recommendations made by subscription services such as Share Advisor, Hidden Winners, and Pro. Here at The Motley Fool, by considering different insights, Better investors than us.
FTSE 100 Investment: Three Reasons for Continued Stock Market Recovery
https://www.fool.co.uk/investing/2021/01/09/ftse-100-investing-3-reasons-the-stock-market-rally-will-continue/ FTSE 100 Investment: Three Reasons for Continued Stock Market Recovery