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Signs of what the future might hold #finance

Investors are always looking for signs of what the future might hold. This week the Federal Reserve in the US caused nervousness when they warned of a “long road to recovery” for the US economy. That would mean a long road to recovery for the global economy. That saw investors on the London Stock Market selling banks and moving to safer investments. When investors are really worried they buy gold and the gold price goes up. Gold hit £1420 an ounce a few weeks ago but was slowly coming down as investors invested back in the stock market sending share prices in banks up. It reversed this week as investors pulled out of the market and we saw the gold price climb again.

Signs of what the future might hold

Bargains

With the banks falling yesterday we could expect some investors to look for bargains when the market opened this morning. The gold price is at 1373 down from 1375 yesterday and shares in Barclays are 1.63% up so far. The market seems quieter than yesterday so investors are being cautious.

Premier Foods

I was pleased to see Premier Foods make progress this week. Their results will be out at the end of the month but we have already had some good news. They plan to pay down some expensive debt that is costing them in excess of 5% and they also plan to sell their half of Hovis. That will reduce their outgoings on debt and give them some cash to spend on marketing their existing products more effectively. The share price went through the 50p barrier yesterday and many small investors are expecting it to rise further. Like most prices, it is suppressed by the recession so looking long term it could go up to £1 or more.

Signs of what the future might hold

I’m looking for signs of what the future might hold and trying to diversify a little too. I’m more concerned with avoiding infection than my investments, though. We can see some obvious trends. The travel industry is going to take a big hit with people taking fewer overseas holidays. There has been a trend towards tradition recently with people in lockdown enjoying a traditional afternoon tea. Will teashops serving afternoon tea with cake see a boom? Maybe the traditional seaside holiday will make a comeback. When people feel threatened and insecure they become nostalgic. People are also enjoying our parks and nature reserves more. British tourism could benefit next year if they do some marketing.

Falling market

The falling market this week saw my investments fall by around 4% but at least Premier Foods is in profit and giving a potential return of 12.6% and Barclays is still giving a potential return of 28.77%, so I bought Barclays at the right time. I’ll just sit tight for the time being because I think the market will normalise eventually. We might see some smaller companies fail to survive the pandemic, however.

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