Why 2014 will be a record year of growth for small investors
The New Year has, as always, brought a lot of hope for renewed resolutions across the globe. A lot of these will include personal promises to improve financial discipline and focus on savings, particularly as consumers across the UK – and in many parts of the globe – have started see the evidence of financial troubles easing after what was a severe five-year austerity drive. This is indicated by the FTSE 100’s highest annual increase since 2009, climbing 14.4% over the year to close at 6,749.09 in December.
The upturn in the markets, combined with the huge expansion of choice for small investors that 2013 has given us, will prompt more Brits to push their boundaries in 2014, which could very well see the FTSE 100 trump its record of 6,950.6 points. TD believes that consumers will address the financial options and invest more than ever to make 2014 a record year of growth for small investors.
There are five key points of interest from 2013 that have had an impact on the investing environment and potentially cleared the path for growth in 2014:
1. Internationally, Tech companies continued to perform right to the end of December, accounting for 70% of TD client Top Ten Buys & Sells tables. We can expect this to continue into 2014 with ongoing battles between the big boys. Interestingly, Apple continues to take the top spot of our client buys and sells, despite Samsung overtaking it as the world’s biggest technology company.
2. In 2013, regulators started treating investors like grown-ups and allowed AIM stocks to be included in ISAs. Regulatory changes like this – and the planned removal of stamp duty on AIM stocks, mean there is a very real possibility we will see a bumper stocks and shares ISA season across the first quarter. This could also provide a boost to the resources industry in the coming months as TD AIM trades continued to be dominated by this sector in December.
3. IPOs are high on the agenda and have been a welcome sign of economic improvement. Since listing in October, Royal Mail has featured in the UK TD Top Ten client buys and sells for three consecutive months. The internationally high profile Twitter float gained a huge amount of attention, taking second place for both buys and sells, amongst TD clients in December. In 2014, the UK’s Future Fifty initiative will bear its first fruits in terms of UK IPOs. We expect 5-10 good IPOs in 2014 that will ignite interest from investors and, so long as the offers are high quality, we expect strong interest from small investors.
4. In 2013, consumers started to spend again – in 2014, the public will start thinking about investment again. The ongoing impact of the Retail Distribution Review (RDR) and move to clean funds will make it easier than ever for people to invest, with far more transparency.
5. While retail stocks were largely unpredictable over 2013 and delivered varying results, the sector started 2014 strongly and pushed the FTSE to a higher close in the first weeks. Stocks like Amazon and Tesco have consistently appeared in our international and UK Top Ten Buys & Sells tables and were indeed present in December. Given the increased media interest around UK retailers’ activity through 2013, we expect to see a continued focus in 2014 as their online and expansion plans start to take effect.
The Top 10 UK TD client Buys and Sells for December 2013
|TOP TEN UK BUYS||TOP TEN UK SELLS|
|1||RSA INSURANCE GRP||1||LLOYDS BANKING GP|
|2||LLOYDS BANKING GP||2||GULF KEYSTONE PETR|
|4||GULF KEYSTONE PETR||4||ROYAL MAIL PLC|
|6||IMAGINATION TECH.||6||ROYAL BK SCOT GRP|
|8||HSBC HOLDINGS PLC||8||RSA INSURANCE GRP|
|9||STANDARD CHART PLC||9||CENTAMIN PLC|
|10||SIRIUS MINERALS||10||TOWER RESOURCES|
The Top 10 International TD client Buys and Sells for December 2013
|TOP TEN International BUYS||TOP TEN International SELLS|
|1||APPLE INC||1||APPLE INC|
|2||TWITTER INC||2||TWITTER INC|
|3||TESLA MOTORS INC||3||FACEBOOK INC|
|4||BANK OF IRELAND||4||TESLA MOTORS INC|
|5||3 D SYSTEMS INC||5||MICROSOFT CORP|
|6||FACEBOOK INC||6||INTEL CORP|
|7||AMAZON COM INC||7||CISCO SYSTEMS|
|8||GOOGLE INC||8||3 D SYSTEMS INC|
|9||MICROSOFT CORP||9||JABIL CIRCUIT INC|
|10||JABIL CIRCUIT INC||10||BANK OF IRELAND|