Taking a brief look at global equity markets, particularly those in the US, there is little evidence the world is still in the grips of a pandemic and staring down the barrel of the deepest recession in recent history.
Since mid-March lows, equity markets have for the most part soared, having been buoyed by unprecedented fiscal and monetary spending by governments and central banks around the world in an effort to prevent economic collapse. The rally has been particularly noticeable in tech stocks, with the US Nasdaq 100 returning nearly 20% year to date.
However, evidence suggests retail investors now appear to think the rally cannot be sustained, having withdrawn capital from equity funds in large volumes in June after one of the best quarters in at least a decade for equity markets.
Calastone data shows investors withdrew a net £1.2bn from equity funds in June, with UK funds suffering their worst month on record as £679m and £671m was redeemed from UK equity and UK equity income funds respectively.
Given the pace of the market recovery and the obvious impact of lockdowns in response to the pandemic on companies, perhaps investors can be forgiven for cashing out.
However, as readers will no doubt remind clients from time to time, it is time in the market not timing the market that makes the difference over the long term.
The particularly aggressive volume of withdrawals within UK equity funds may prove to be the most short-sighted reaction, surpassing those seen during the Brexit referendum and the aftermath of the shock result, the lead-up to the General Election, and the onset of the Covid-19 pandemic.
Given the FTSE 250 is up 37.4% since its 19 March year-low, but remains down 19.1% since the start of the year, while the S&P 500, for example, is already trading above levels seen at the start of 2020, perhaps UK equity markets now have the most to offer investors in the coming months.
Although, perhaps investors have made the right decision in reducing their exposure to UK equity markets
Chief economist as Mazars George Lagarias explained UK equity indices face a "confluence of a sharp economic slowdown and heavy weight on troubled industries [such as oil and banks] is the cause for the downward trend".
He added: "Investors need to think deeply about the long term implications of Covid and a potential hard Brexit to the economy and risk assets."
Indeed, after four long years, encompassing thousands of newspaper columns, numerous parliamentary battles and a deep divide in British society, the proponents of a ‘softer' Brexit appear to have lost the argument.
While 2020 has seen the UK face unprecedented challenges, as the transition period comes to an end at the end of this year, 2021 is set to pose yet another unknown to the country and its capital markets.