Is there still time to go bargain hunting for investments?

Podcast Summary

• Finding bargains in undervalued investments amid economic uncertainty: Amid economic uncertainty, focus on undervalued investments for potential higher returns and risk mitigation. Central banks' stimulus could lead to inflation and market correction, so thorough research and professional advice are crucial.

  Despite the challenging economic climate caused by the coronavirus pandemic, there are opportunities for investors to find bargains by looking for investments that are undervalued and haven't yet reached peak prices. The US stock market, in particular, has seen significant growth and some concern that it may have gotten ahead of itself. Central banks and governments have injected large amounts of stimulus into the economy, which could potentially lead to inflation and a market correction. By focusing on undervalued investments, investors may be able to mitigate risks and potentially achieve higher returns in the future. However, it's important to note that investing always comes with risks, and it's essential to do thorough research and consider seeking advice from financial professionals before making any investment decisions.

• Companies in remote work, e-commerce, and home improvements sectors have seen significant growth during the pandemic: Some companies in sectors like tech, retail, and home improvements have experienced temporary growth due to pandemic-driven trends, but it's uncertain if this growth will continue post-pandemic.

  The pandemic has accelerated existing trends towards remote work, e-commerce, and home improvements. Companies in these sectors, such as tech firms, Amazon, Google, Microsoft, Zoom, and retailers like Halfords and Kingfisher, have seen significant growth. However, it's unclear if this growth is a temporary momentum or a permanent shift in consumer behavior. For instance, B&Q and Halfords have reported increased sales during the pandemic, but it remains to be seen if these new customers will continue to shop with them in the future. Similarly, Naked Wines, a wine retailer, has also seen growth due to the pandemic, but it's uncertain if this growth will continue beyond the current situation. Therefore, while some companies have benefited greatly from the pandemic, it's essential to consider whether their success is sustainable in the long term.

• Naked Wines' Sales Surge During Lockdown: Naked Wines saw a sales increase during lockdown, but it's an expensive investment with losses each year. Diversify investments to mitigate risks.

  Naked Wines, a wine retailer that cuts out the middlemen to offer consumers better quality wine at cheaper prices while supporting winegrowers, has experienced a significant increase in sales and customers during the lockdown. This shift is likely to continue, as more people have adopted the habit of buying wine online. However, it's essential to note that Naked Wines doesn't make a profit and is an expensive investment due to its losses each year. When bargain hunting, it's crucial not to put all your eggs in one basket and to diversify your investments across different companies that don't share the same risks. The alcohol sales trend during the lockdown suggests that people may continue to buy more wine at home, but the market can be unpredictable, and even successful companies may face challenges in the future.

• Investing in funds or trusts vs individual shares: Diversifying risk: Considering sector or style focus in funds, higher risk in individual shares, potential bargain in FTSE 100 due to weaker pound, thorough research crucial before investing

  Investing in funds or investment trusts can help diversify risk by having a larger number of companies, but it's important to consider the sector or style focus. Bargain hunting individual shares comes with higher risk, as the potential for a company to keep declining is a real possibility. Additionally, the value of the FTSE 100 and the pound are connected, with a weaker pound making UK investments cheaper for overseas investors. The FTSE 100, which is largely made up of international companies, has not recovered as much as other markets after the coronavirus crash, making it a potential bargain for some investors. However, it's important to do thorough research and consider the specific risks and potential rewards before making any investment decisions.

• Find bargains in UK, Europe, commercial property, Latin America, Japan, and tech: Explore investment opportunities in the UK, Europe's smaller companies, commercial property, Latin America, Japan, and technology sectors for potential bargains.

  Despite the current economic uncertainty, there are potential investment bargains to be found in various asset classes. These include the UK market, which some experts believe could see a resurgence if Brexit turns out to be less dreadful than expected. Europe's smaller companies are also under-researched and offer opportunities for investors. Commercial property, particularly through investment trusts, could be a bargain despite the challenges faced by the sector. Latin America and basic resources may benefit from geopolitical changes and the recovery of commodity prices, respectively. Japan's small caps could be a smart play given the country's ongoing efforts to boost its stock market. Technology companies, which have seen meteoric growth, may still offer value with their vast cash reserves and underappreciated assets. It's important to note that investing always carries risk, and thorough research and careful consideration are essential before making any investment decisions.

• Tesla, Elon Musk, and the UK's Spending Review Discussed: Despite debates on Tesla's value and Elon Musk's companies, the economic downturn and UK's spending review were acknowledged, with a focus on continued support.

  The discussion touched on the debatable value of Tesla, Elon Musk's innovative ventures, and the UK's spending review presented by Rishi Sunak. While some argue that Tesla is a game-changer despite its high valuation, others see it as an overvalued investment. Elon Musk's accomplishments and potential future projects were acknowledged, but concerns about the financial implications of his companies and personal wealth were raised. The spending review was described as a massive spending speech with low interest rates, large debt, and a significant increase in spending. The economic downturn was acknowledged, with a projected 11.3% decrease in GDP this year. Rishi Sunak's approach to spending to pull the country out of the crisis was generally supported, although concerns were raised about the handing out of money to various sectors and the lack of clarity on certain restrictions, such as pub rules. The overall sentiment was that while the speakers presented unbelievable sums of money, there was a recognition of the economic challenges ahead and the need for continued support.

• Economic Recovery Uncertain with Complex Challenges: The economic recovery from the pandemic may not follow a traditional V-shape due to ongoing restrictions and job losses, leading to decreased tax receipts, increased spending, and potential future consequences from money printing.

  The economic recovery from the pandemic is uncertain and may not follow a traditional V-shape. The chancellor has had to provide significant financial support to various sectors, including pubs, due to restrictions requiring customers to purchase meals with their drinks. This has led to a decrease in tax receipts and an increase in spending. The Bank of England has been printing money to finance this spending, but there may be consequences in the future. The recovery might not be as strong as expected, and there is a possibility of negative growth in the coming quarters. Despite these challenges, there are reasons for optimism, as people have shown a strong desire to spend once restrictions eased. However, there are major concerns about job losses. Overall, the economic situation remains complex and uncertain.

• Cautious Optimism in Economic Outlook: People are saving and eager to spend, potentially leading to increased hiring and economic growth. However, the OBR's forecasts may be overly pessimistic and the RPI's phase-out could impact investors.

  Despite economic uncertainty and job losses, there's reason to believe that consumer spending could pick up in the coming months. People are saving money and eager to spend it on experiences like travel and holidays. This increased spending could lead to businesses rehiring and further economic growth. However, it's important to note that the Office for Budget Responsibility (OBR) may have been overly pessimistic in their forecasts. While optimism should be balanced with reality, there's potential for a virtuous circle of spending, hiring, and economic recovery. Additionally, the Retail Prices Index (RPI), an old method of measuring inflation, will not be phased out, which could impact investors and pension holders. Overall, there's a sense of cautious optimism in the economic outlook.

• RPI not phased out yet, but savings rates tumble: Pensioners and investors breathe a sigh of relief as RPI isn't phased out, but students and commuters face increased costs. Savings rates continue to drop, forcing savers to consider safer alternatives or investing with risk.

  The Retail Prices Index (RPI) will not be phased out as soon as expected, which is good news for pensioners and investors with RPI-linked bonds and pension payouts. However, students with student loans and commuters with train tickets linked to RPI will have to pay more. On the other hand, savings rates are continuing to tumble, with Marcus cutting its rates again to 0.5%, and NS&I following suit with cuts to easy access account rates as low as 0.1%. Savers are facing tough times, but keeping money under the mattress is not a good option as it might get robbed or be uncomfortable. Instead, they could consider keeping their money in cash at home as a safer alternative or investing it with the understanding that there is a risk of losing some money. Despite the challenging savings landscape, it's essential to keep money in the best possible place to earn a return, even if it's just a small one.

• Cautious investment and planning are crucial: Consider risks and potential rewards before making significant investments or travel plans, with a rainy day fund and flexible options.

  Cautious investment and careful planning are key when it comes to both financial and travel decisions. With the uncertainty surrounding the rollout of coronavirus vaccines and the easing of travel restrictions, it's important to have a rainy day fund and avoid putting all your eggs in one basket. The travel industry has seen vast losses and companies going bust, but there are currently discounted deals and flexible booking options available. However, it's important to consider the potential vested interests of travel experts and the possibility of capacity shortages leading to higher prices once demand returns. Overall, it's a good idea to carefully weigh the risks and potential rewards before making any significant investments or travel plans.

• Travel industry bouncing back with potential price surge: The travel industry is recovering, but prices may rise. Flexibility in booking is essential. Consider double or triple glazing based on budget, energy efficiency, and preference.

  The travel industry is expected to bounce back strongly once restrictions lift, leading to a potential surge in demand and potentially higher prices for travelers. However, it's important to note that plans may change, and flexibility in booking is crucial. While some may argue that now is a good time to book big trips due to current lower prices, others may prefer to wait and see. Additionally, there is a trend towards package holidays due to the greater financial protection they offer. In the world of home improvements, another listener asked about the difference between double and triple glazing. The main difference lies in the number of glass panes and air gaps. Double glazing has two panes and a 16mm gap, while triple glazing has three panes and two gaps. The choice between the two depends on factors such as budget, energy efficiency needs, and personal preference.

• Is triple glazing worth the investment?: Triple glazing offers better insulation and soundproofing but comes with a higher cost. Low-E glass is recommended for energy efficiency. Individual circumstances, such as location, climate, and noise levels, determine if triple glazing is worth the investment.

  While triple glazing can offer better insulation and soundproofing than double glazed windows, it comes with a higher cost due to the additional pane of glass and upgraded components. The Energy Savings Trust recommends low emissivity (Low-E) glass for energy efficiency, which reflects heat back into the home while allowing light in. However, whether triple glazing is worth the investment depends on individual circumstances, such as property location, climate, and noise levels. For those living in colder areas or near busy roads, the added benefits of triple glazing may outweigh the cost. Ultimately, it's a personal choice and budget consideration. If you're interested in sharing your thoughts or experiences with triple glazing, feel free to email editor@thisismoney.co.uk, tweet @thisismoney, or join the debate at thisismoney.co.uk/forward/podcast. And don't forget to rate and subscribe to our podcast to help spread the word.