October 2020: A miserable end to a miserable month

It’s national lockdown, in England, again.

It seemed pretty bad being put into Tier 2, here in London. This arcane form of lockdown jargon has us Londoners unable to socialise indoors with people from another household. Which turns every law-abiding restaurant’s dinner, at least in central London, into Valentine’s night.

The weather has been miserable too. The wettest month for over 10 years. Thankfully, not unrelentingly so.

Zone 2, London

But at the end of the month, kaboom, we have another national lockdown for (at least) a month. It doesn’t sound as if it will be quite as bad as the spring version – while pubs/restaurants have to close for eat in dining, takeaway-etc is very much allowed, and a variety of shops/services are allowed to continue to trade. But household mixing is off, almost including outdoors, and misery has set in.

Election? Wot election?

The stock markets seemed to catch wind of the impending doom, but only in a vague way – as if the first whiff of smoke from that dining room curtain catching fire have just started to reach the kitchen. Nobody’s really told the Australians either – where local markets actually rose in the month (reflecting the gradual easing of the incredibly tight lockdown restrictions), even as the currency fell.

Equity markets across the Atlantic were down 3-5%. Bonds were generally down a bit too. The pound actually had a fairly decent month, with most bad news about Brexit priced in.

Market movements, October 2020

Markets fell, in GBP terms, about 4% in the month. Against this backdrop, I was pleasantly surprised to see my portfolio has ‘only’ fallen 1.5%. This feels suspicious – as if I have forgotten some windfall during the month – but after doublechecking I do believe these figures are accurate.

My allocation remains in a similar posture to recent months – I am slightly underweight in equities (waiting for resolution of the US election and Brexit), and somewhat overweight in cash.

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