Last year was, by any measure, extraordinary. The collapse in economic activity around the world has resulted in some of the deepest recessions for decades – in the case of the UK, the deepest annual fall in GDP since the 18th century. But it was also unusual because the current economic slump was not triggered by economic factors, such as rising interest rates or collapsing asset prices, but by government policies to limit mobility in the face of the COVID pandemic. The almost immediate stoppage of economic activity last year also resulted in one of the fastest falls of equity markets around the world since 1929 as investors adjusted to the new (and understandably unexpected) reality. While the speed of correction in equity prices was unusually rapid, the recovery from the bear market trough last March has been impressive: It far exceeded the typical path from a bear market trough and has followed a similar trajectory to the recovery from the low in...read more...