2020 Year in Review<br>The “COVID Compression” Year
Here we are, just closing out 2020, and this was a year we’ll never forget. We started out the year with a bang, as the S&P 500 hit a new record high of 3257 the first day the market was open. More records came over the next few weeks, and on 19 February the S&P 500 had its “13th” new high of the year, closing at 3386. I’m not superstitious, but then it happened. Coronavirus hit and our lives changed. Suddenly the markets sold off culminating in the quickest fall ever. Over the next five weeks, the S&P 500 dropped 34% closing at 2237 on 23 March. This was historic, as it averaged just over a 1% loss each trading day. In the throes of despair, the markets then reversed, starting the quickest rebound ever. We kept fighting back, and on 18 August, six months after the sell off started, we made a new S&P 500 record high of 3389. As 2020 closed out, we did have good news with the COVID vaccine becoming a reality. That said, on the final trading day of 2020 the S&P 500 set another new record at 3756, something I would never have expected on 23 March. Finally, I’d like to compare the 2020 market to 2019. From a volatility perspective, the S&P 500 had 110 out of 253 trading days of closing up or down 1%, while in 2019 there were only 38 days. Next, let’s compare 2020 to previous bear markets to further emphasize the magnitude of this year’s market movement. If you compare 2020\'s S&P 500 daily chart, it looks very similar to the 2008 bear market and seven plus years of financial fallout (October 2006 through December 2013). Putting it another way, we “compressed” seven years of movement into 2020, so it is no wonder we are a little exhausted as we finish out the year. With regard to the start of 2021, our current allocation still looks strong. During Christmas week both the C and I funds consolidated while the S fund hit new records. This week the S fund consolidated while the C and I fund hit records. Hopefully next week all three will hit new records and give us a nice Santa Claus Rally!!
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2020 Year in Review<br>The “COVID Compression” Year
Here we are, just closing out 2020, and this was a year we’ll never forget. We started out the year with a bang, as the S&P 500 hit a new record high of 3257 the first day the market was open. More records came over the next few weeks, and on 19 February the S&P 500 had its “13th” new high of the year, closing at 3386. I’m not superstitious, but then it happened. Coronavirus hit and our lives changed. Suddenly the markets sold off culminating in the quickest fall ever. Over the next five weeks, the S&P 500 dropped 34% closing at 2237 on 23 March. This was historic, as it averaged just over a 1% loss each trading day. In the throes of despair, the markets then reversed, starting the quickest rebound ever. We kept fighting back, and on 18 August, six months after the sell off started, we made a new S&P 500 record high of 3389. As 2020 closed out, we did have good news with the COVID vaccine becoming a reality. That said, on the final trading day of 2020 the S&P 500 set another new record at 3756, something I would never have expected on 23 March. Finally, I’d like to compare the 2020 market to 2019. From a volatility perspective, the S&P 500 had 110 out of 253 trading days of closing up or down 1%, while in 2019 there were only 38 days. Next, let’s compare 2020 to previous bear markets to further emphasize the magnitude of this year’s market movement. If you compare 2020\'s S&P 500 daily chart, it looks very similar to the 2008 bear market and seven plus years of financial fallout (October 2006 through December 2013). Putting it another way, we “compressed” seven years of movement into 2020, so it is no wonder we are a little exhausted as we finish out the year. With regard to the start of 2021, our current allocation still looks strong. During Christmas week both the C and I funds consolidated while the S fund hit new records. This week the S fund consolidated while the C and I fund hit records. Hopefully next week all three will hit new records and give us a nice Santa Claus Rally!!
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