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  1. Post-Pandemic Investment Market Outlook | J.P. Morgan Asset Management

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Saver to Investor

Post-Pandemic Investment Market Outlook


While the economic recovery will create opportunities for investors, the likelihood of low interest rates for years to come poses a threat to cash savers.

Marketing communication

Where will we be in 10-15 years? For the past 26 years, J.P. Morgan Asset Management’s most experienced economists and investors have set out to consider that question in our in our long-term market outlook, which we publish each year. Almost two years on from the start of the Covid-19 pandemic, our 2022 report examines the longer-term economic impact of the virus and the high-level policy choices that were made to contain the damage.

The key message from our outlook is better expressed in words than in numbers: optimism and opportunity.

Today, the global economy enjoys strong momentum, kicked off by bold central bank decisions and sustained by a robust business spending cycle and solid household finances. Overall, the economic scarring from Covid-19 has been limited. However, the policy decisions that were instrumental in instigating the recovery are likely to have a lasting impact on savers and investors.

Inflation and interest rate outlook

With inflation in the UK rising at its fastest pace in a decade, it’s a subject that features prominently on investors’ lists of worries. Our report concludes that inflation is likely to remain elevated, given high levels of demand for goods coupled with supply constraints in a range of key areas. The labour market will also lead to higher prices as employers compete for workers – the UK’s recent lorry driver shortage offered an example of how tightness in one area can influence the wider economy.

Despite our positive expectations of global economic growth and inflationary forces that are not likely to reverse in the near term, our report projects interest rates to rise only slowly. While ordinarily economic growth and inflation would be the signal that interest rates are due to rise, governments around the world are doing their best to safeguard the fragile economic recovery.

For savers, the dynamic of ‘sticky’ inflation and low interest rates means that money held in bank accounts will very likely lose value in real terms. We project cash returns of only 1.5% in sterling over the next 10-15 years, far below the expected rate of inflation1.

Overcoming misconceptions

At the start of this year, we surveyed more than 6,000 savers and investors, and saving for retirement emerged as a leading motivation (42% of women and 38% of men), with growing their money another widely held goal2.

Yet, given the real-return dynamic outlined above, achieving these ambitions may well prove impossible unless some common misconceptions can be overcome.

The same survey showed that 44% of women and 39% of men fear volatility in markets, which helps explain why 26% of men and 36% of women said they have no investments at all. Among this group, more than half of men and women believe investing is akin to gambling.

Market volatility is normal

The dramatic stock market graphs shown on news reports at times of market stress, like in the early days of the pandemic, play on this fear of sudden losses. But from a longer-term perspective, research makes it clear that volatility in markets is normal.

Looking at the UK stock market over the past 35 years, 70% of calendar years ended in positive returns3. Far from treating investment as a gamble, the data shows that a patient approach allows investors to ride out the ups and downs while harvesting long-term appreciation. Past results do not guarantee future returns but it’s clear that this approach has enabled patient investors to capitalise on the overall rise of the stock market. While investing is inherently more risky than saving, our research highlights the very tangible risk of losing money in real terms if savings are held in bank accounts.

If this article has got you thinking about whether investing could help you protect your savings and achieve your goals, try our digital experience to learn more about markets and what they can do for your money.

1 Source: J.P. Morgan Asset Management 2022 Long-Term Capital Market Assumptions.
2 J.P. Morgan Asset Management Saver to Investor Survey, January 2022.
3 J.P. Morgan Asset Management Guide to the Markets – UK page 93.

Download the investor survey

Get all the results from our Saver to Investor Survey and find out the latest thinking of savers and investors across 10 European countries.

Read the report

This is a marketing communication and as such the views contained herein are not to be taken as advice or a recommendation to buy or sell any investment or interest thereto. Reliance upon information in this material is at the sole discretion of the reader. Any research in this document has been obtained and may have been acted upon by J.P. Morgan Asset Management for its own purpose. The results of such research are being made available as additional information and do not necessarily reflect the views of J.P. Morgan Asset Management. Any forecasts, figures, opinions, statements of financial market trends or investment techniques and strategies expressed are, unless otherwise stated, J.P. Morgan Asset Management’s own at the date of this document. They are considered to be reliable at the time of writing, may not necessarily be all inclusive and are not guaranteed as to accuracy. They may be subject to change without reference or notification to you. It should be noted that the value of investments and the income from them may fluctuate in accordance with market conditions and investors may not get back the full amount invested. Past performance and yield are not a reliable indicator of current and future results. There is no guarantee that any forecast made will come to pass. J.P. Morgan Asset Management is the brand name for the asset management business of JPMorgan Chase & Co. and its affiliates worldwide. To the extent permitted by applicable law, we may record telephone calls and monitor electronic communications to comply with our legal and regulatory obligations and internal policies. Personal data will be collected, stored and processed by J.P. Morgan Asset Management in accordance with our EMEA Privacy Policy www.jpmorgan.com/emea-privacy-policy. This communication is issued in Europe (excluding UK) by JPMorgan Asset Management (Europe) S.à r.l., 6 route de Trèves, L-2633 Senningerberg, Grand Duchy of Luxembourg, R.C.S. Luxembourg B27900, corporate capital EUR 10.000.000. This communication is issued in the UK by JPMorgan Asset Management (UK) Limited, which is authorised and regulated by the Financial Conduct Authority. Registered in England No. 01161446. Registered address: 25 Bank Street, Canary Wharf, London E14 5JP.