Investor Perspective: Did the pandemic make you richer?

If you look at today’s news or talk to anyone remotely interested in the markets, you will get a grim view.

You might feel this way too. I feel it.

It is no surprise this year; everything has gone down. Stocks fell together with bonds, something that rarely happens at this scale.

US but relevant:

US stocks vs bond returns 1926-2022

You might be saying- Investing is costing me dearly.

In this post, I want to stop, take a step back and look at all asset classes since the pandemic began.

How have assets performed since then, including this year’s decline?

The results will give us perspective.

I am not even considering our incredible bull run in the past decade—just the past three years.

Since we started with paper assets, let’s talk stocks first.


My go-to stocks benchmark is the world’s stock market, as tracked by the FTSE All-world index.

It includes large and medium-sized companies in developed and emerging countries.

Here is Vanguard’s performance in British pounds from the beginning of 2020 to November 2022.

World stocks 2020-2022 performance


Not bad if you consider the market’s mood. High inflation and rising interest rates nonetheless, yet the world’s best companies keep chugging along.

The elephant in the room is our crashing local currency (GBP). On the 3rd of January, GBP/USD was 1.30. As I’m writing this on November 13th, GBP is now down to 1.18.

A weakening currency has softened the blow. But still, not a bad outcome overall. You’re still making money after a global pandemic and one of the biggest interest rate hikes in history!

Of course, if you engaged in any stock picking, you might have done better or worse. Energy and healthcare have done very well. Big tech, China tech, and some popular growth stocks have been hammered.

Amazon is down 8% since Jan 2020 and down 50% this year alone.

Facebook is trading like a Squidcoin, down -75% this year. Investors do not back metaverse. They are laying off 11,000 employees. Mark structured $META voting shares so that he has the only (and final) say in what happens inside the company. Investors who disagree with the vision can’t do much about it.

But as the index above shows, investors have been doing OK on average.

2020-2022 In the black? Yes! A global pandemic could not stop the relentless march of the best companies in the world.


Bonds have been hammered this year. A sharp rise in interest rates caused their price to drop dramatically.

Bonds are more straightforward than stocks. In one sentence:

If you buy a 10-year government bond yielding 4% per year, put it in the drawer and come back in 10 years, that’s what you will earn. 

4% per year.

With high-quality government bonds, in particular, there is no credit risk.

The UK will not default on its debt. The Bank of England might print money to meet its obligations and cause more inflation.

But The Bank never goes bankrupt.

Monopoly the bank never goes bankrupt

The big misconception (dare I say hate) about bonds comes from people’s desire to sell BEFORE they mature.

How much you can sell your bond before its maturity depends on how much other similar bonds sell for.

Investors will ask for a discount if newer, flashier bonds yield higher than yours. Or, if rates are lower now, you can earn a premium on your higher-rate bond.

So how much your Gov bonds got hit by today’s interest rate rises depends primarily on your bond’s duration.

Short-duration government bonds, 0-5 years, like iShares IGLS, only lost -4.36% since 2020.

Longer-term government bonds, like VGOV UK Gilts, are down -35% since Jan 2020.


This is why 2022 is one of the most challenging years. There is nowhere to hide other than cash.

But because of this massive drop and higher rates, the math says bond returns are much prettier looking forward.

Perhaps a more inclusive bond fund is the Bloomberg Aggregate Bond index.

It contains various durations, including corporate ones (investment grade).

It was yielding almost 5% a year at the end of September. Not bad for a practically risk-free asset!

Fixed income Bloomberg Aggregate Bond

See VAGS ETF, which tracks the Bloomberg Global Aggregate bond.

It has lost about -12% since the beginning of 2020. But holding it for its maturity (8.81 years) would give about 4.8% a year.

Bonds are sexy again! 

It’s also why the good old “sixty-forty” portfolio is back in the game. It consists of 60% stocks and 40% bonds.

One fund that includes exactly that mix is Vanguard’s LifeStrategy 60 Fund. A one-stop-shop.

Change to 80% or 40% if you want a more aggressive or defensive allocation.

Sure, interest rates ruined the party. But now, bonds offer pretty good yields from now on!

Bonds: In the black? No! But future bonds look much more attractive.

UK Property

Property. One of the most beloved assets.

Property has had a phenomenal run since the 1980s. Part of it was thanks to booming London and the southeast, positive UK net migration and last but not least: Dropping interest rates.

Interest rates are the price of money. We had 40 years of declining interest rates, from 15% in the 80s to zero in the 2010s.

Asset prices went up.

Mortgages became very cheap. But not anymore.

Interest rates have started climbing fast. The Bank of England has hiked rates to 3%, and further increases are on the horizon, set to reach 4.5% in 2023.

If you’re considering buying property, you’ll find pricier mortgages until the markets calm.

I feel bad for first-time buyers because housing and mortgages have climbed even higher.

Average fixed rate mortgages UK across loan-to-value ratios
Source: Buil

A pandemic and higher rates have not caused a property crash.

Take a look at house prices up +20% since January 2020. Mad.

UK House prices Dec 2018 to Sept 2022
Source: Statista

And another one from Halifax.

Halifax House Price Index October 2022 update

Tenants have also seen their monthly rent go up.

Although I am not very optimistic about UK property, I don’t foresee a UK crash others predict. We may see a deeper slowdown in sales which is already happening.

Persimmon, the house builder, just reported the last six weeks have seen cancellation rates increase to 28% from 21% in the preceding 12 weeks from 1 July 2022,

It’s no surprise if you think the average mortgage rates have tripled in a year! Higher rates also led Property Partner to halt their dividends on mortgaged properties. Again :/

But rents are going up fast. Fewer buyers mean more renters. Our flat could be let for 20% higher today than in Jan 2020.

Private rental prices paid by tenants in the UK rose by 3.6% in the 12 months to September 2022, up from 3.4% in the 12 months to August 2022, ONS says.

REITs have been hammered, though. UK REITs trade at massive discounts to their last reported asset values. Think 30-40%. They run low loan-to-value ratios (15-20%) and pay solid dividends of about 5-7%. Rents keep increasing there too.

I’ll go back and re-read my UK REITs guide. I see an opportunity, despite my passive investing philosophy holding me back!

To sum up, UK property has performed very well since the pandemic.


Gold provided much-needed comfort in 2020 when the world was falling apart.

Then as stocks started making new heights, gold lost value in 2021. As inflation expectations rose towards the end of 2021, gold skyrocketed higher.

I expected a better performance in this environment due to gold’s ‘safe haven’ nature. The shiny metal has not disappointed us, all things considered.

Jan 2020 – Nov 2022

  • +26.4% in GBP
  • +13.7% in USD
Gold price GBP Jan 2018 - November 2022
Source: BullionVault

Bitcoin and Crypto

Never a dull week in crypto!

Where to start with this bad boy. Bitcoin has had a fantastic run since Jan 2020.

It made some people incredibly rich in 2021, touching $69,000 a bitcoin. Ethereum’s all-time high was $4,800.

We saw a new army of issued tokens and people quitting their jobs to work on Web3 startups and NFTs.

This became a disaster when rates started rising in 2022. Money is not free anymore.

Crypto scams and fraudsters are everywhere – as they’ve always been. Now, however, the scale is much bigger.

We’re talking billions of money lost in the recent FTX exchange collapse alone. Not your keys, not your coins.

The probability of contagion to other exchanges is higher now. If you have money in Binance, Coinbase or other exchanges, get a cold storage wallet like Ledger or Trezor. Move your crypto off the exchange.

Despite the rollercoaster ride, the buy-and-hold Bitcoin investor has done OK. Smaller coins and crypto miners, on the other hand, destroyed wealth.

I wonder if this hypothetical person exists. I have certainly adventured in more than buy-and-hodl. In the past three years, I probably lost more money than I made, despite BTC being higher!

The Bitcoin holder, however, has seen their wealth more than double from Jan 2020 ($7,000) to Nov 2022 ($17,000).


After a decade of underperformance, the three years since COVID started saw commodities boom.

Covid Supply shocks meant products moved harder. We stopped buying cheap energy from Russia. Ukraine grain exports reduced significantly.

A perfect mix made resources scarcer and led to higher prices.

Take the Bloomberg Commodities index, which includes oil, grains and precious metals, amongst other commodities.

Invesco Bloomberg commodity UCITS ETF performance in GBP
Invesco Bloomberg commodity UCITS ETF performance in GBP

HL Link: Invesco ETF (GBP)

+65% in almost 3 years!

What can we tell from past data?

One thing is clear as I’m writing this.

Being in the markets paid off.

Investors are, on average, wealthier now than they were in January 2020.

I am sure some people also lost money overall. Those who went big on tech or people with significant bond allocations might have to wait until their wealth recovers.

Or if you sinned a little and timed most of your contributions at the highs of 2021, when things were rosy.

But on average, those who invested steadily have seen their Jan 2020 wealth increase in most assets than not.

What about the future?

UK Inflation was running at about 9% in Sept 2022. Cash loses purchasing power.

Inflation is rolling over, as the US has just shown us. The UK still lacks energy resources and has a trade and account deficit. Let’s not forget have shot ourselves in the foot economically with the recent mini-Budget despite the opposite direction that followed.

I doubt we will see the 1-2% inflation rates we were used to. A higher base of 3-4% inflation is more likely in the UK if you ask me.

Not investing comes at a cost. What’s the alternative? Keep cash, and if so, for how long?

Thankfully some banks have started paying semi-decent rates. Marcus pays 2.5% a year before taxes. Chase UK 2.1% plus 1% cashback on spending.

But they only go so far. With fixed mortgages ending and new rates slowly taking over, 5-6% mortgages will catch up with us.

One strategy would be to overpay your mortgage and get this guaranteed 6% return in your pocket.

Another one would be to start investing now. Perhaps open this JISA you’ve been putting off.

Or take a look at investing your company profits. Many people now thank themselves for taking action earlier.

Future investment returns look quite promising, according to Research Affiliates, even for boring bonds.

Research affiliates 10 year expected returns GBP
10-year expected returns. Quite a fun tool, and obviously, nothing is guaranteed or investment advice.

A global 80/20 portfolio is looking at an expected 7.5% return per year for the next 10 years.

This might sound quite high. But when you factor in elevated inflation, it’s only a 2.4% annual return AFTER inflation.

UK stocks? 11.6% expected return, before inflation. Not bad, and I am surprised they think UK equities will outperform. We shall see.

My plan is to keep a balance between investing and overpaying the mortgage, overweighting the investing side. Keep those contributions coming in, zoom out, and enjoy the ride.

You know my investing philosophy. Spending months to perfect your asset allocation is counterproductive. It is only known in hindsight, after all.

Keep things simple. Grab a copy of Smarter Investing or look at simple, diversified funds like the Vanguard LifeStrategy series.

Thank you for reading!

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