Welcome to 2020, welcome to the 20s but for the pedants, not welcome to a new decade.

Many of you will recall that for several years I kept all the predictions made around the 1 January by the great and the good and then compared them a year later with actual outcomes. I stopped doing that a few years ago – it all became a bit samey and boring, and I had made my point. However I still find it irresistible to read the big commentators predictions, the “10 stocks to own for 2020” and so on.

It is easier to look backwards and see what has gone before. Several articles are looking at the last 10 years. I am thinking back to the start of the Noughties. It does not feel that long ago. I worked in the busy Hemel Hempstead office of Hillier Hopkins, Westlife were at number1 with I have a Dream / Seasons In The Sun and Mr Blair was in Number 10. The iPhone did not exist, auditors were worried about Y2K and the FTSE 100 stood at 6,930.20 on 1 January 2000. It is the last of these facts that is the toughest in a quiz. The FTSE 100 did not surpass that level until Autumn of 2016. That is over 15 years of zero capital growth ( there were of course dividends ). I realised a few months ago that I had somehow pushed this fact to the back of my mind.

Our portfolios were less sophisticated then but they were already globally diversified, which helped. However it is a salutary reminder. Satis, thanks to you, loses very few clients. That means that we intend to, and hugely enjoy, acting for families for decades. The period of my working life ( nearly 40 years ) has been characterised by great and rising prosperity around the world and, by and large, lovely returns from property and equities. But looking back over longer time frames I see that 10 year downturns are not that unusual. Definitions matter here. Bear markets rarely last ten years, in fact they average less than two years. What I am interested in is the recovery period. Since we recommend that clients pretty much always stay invested , our clients would have been invested on 1 January 2000. If they had held a UK tracker it would take a good 15 years to get back to the previous peak. That can be tough. There are some other ways of looking at these statistics and there are numerous learned articles on the topic. For example it is true to say of the US market that bear markets have only existed in 20 of the last 90 years. That sounds reassuring but part of our function is to prepare clients for downturns. Look at the Japanese market. The Nikkei peaked in 1990 at something over 37,000; 30 years later and the market has not recovered and has not seen 25,000 since 1991.

The key point is that if you are investing for decades you should be surprised if you do not see several very tough elongated periods of poor returns. A ten year downturn is not very unusual and bear markets occur very regularly.

There is no hidden message here, I am not predicting a downturn ( or anything else ). The doomsters who predict a downturn every year will be right eventually, it does not make their comments helpful.

I realise that seeking to predict the next twenty years is fearsomely difficult. When I think back to Millenium celebrations ( that is what we called them, I know it is technically incorrect ) and look back at the articles written around that time I do not see any predictions about politics that ring true. I do not see any predictions that capture the huge changes in technology and social media. The articles I can find are largely optimistic; there is a theme of co-operation and hope for the future. With the exception of politics it appears to me that we have made great strides globally. From absolute poverty to education to acceptance of diversity and scores of other fields the globe has made great measurable progress. The grim state of global politics, and I am thinking here of the vacation of the centreground, will I fear haunt at least the immediate future. But we generally steer clear of political debate.

In line with all our published articles I am not making any stockmarket, inflation or interest rate predictions. There are two factors that I hope will shape the next 20 years

One is the United Nations 17 Sustainable Development Goals. These are gaining greater recognition in the mainstream press and amongst the next generation down from mine. To see so many leading commercial firms devoting serious budgets to this topic is encouraging.

The second is the widespread sea change in understanding the purpose of business or capitalism. The number of serious blue chip companies making announcements and changes to their strategy to acknowledge that profit is not the only desired outcome for a business is jaw dropping. Of course the cynics will point to self interest, green washing and deviousness. They have a point. And any company wishing to win the hearts, minds and wallets of the younger generation will have to acknowledge a wider purpose and responsibility just to win clients and sell stuff. But the mood has changed. Look at the United Nations Global Compact – 9,000 members and counting. Look at the World Economic Forum and its work with Deloittes ( incidentally a spin off story is that the global trust in business at 52% is higher than global trust in government – 43 % ). Perhaps most striking is the Business Roundtable ( BRT ) . This powerful group of American CEOs has for twenty years asserted that the shareholders come first. However on 19 August 2019 the BRT issued a new statement about its purpose. The new document includes references to “creating value for customers”, “investing in employees”, “supporting the communities in which we work” and “protecting the environment” and lots of other great aims. When 181 CEOs of American companies sign up for a statement like this and close with Each of our stakeholders is essential. We commit to deliver value to all of them, for the future success of our companies, our communities and our country.” we should take notice. Something is afoot. Finally in 2018, Larry Fink ( CEO of BlackRock the world’s largest asset manager ) in his annual letter to CEOs made “a sense of purpose” the central theme in his letter. When the world’s largest investor writes to CEOs encouraging a sense of purpose, recipients should listen.

There are problems with the “purpose AND profit” strapline, particularly around data. However the landscape around companies’ purpose is changing and it is Millenials who are changing it. Every commentator, analyst and investor should consider how to react to these changing times.