2020 has been nothing short of breathtaking. The S&P 500 reached an all-time high on February 19th and then proceeded to plummet by 34% by March 23rd due to the Coronavirus pandemic – BREATHTAKING. We have all been ordered to stay home since mid-March and have experienced emotions unlike we ever have ever felt – BREATHTAKING. Oil prices crashed – down 68% by April 29th as anticipated supplies flooded the market and demand evaporated due to a halt to economic and manufacturing activity from Covid-19 – BREATHTAKING. And now, civil unrest due to the George Floyd incident have resulted in raw emotions and turned into protests, looting, and destruction in our cities – BREATHTAKING.
However, despite it all, the S&P 500 has returned over 37% in the last 50 trading days marking the largest 50 day S&P 500 rally in history – BREATHTAKING. Oil prices are up 48% since the low point and now we are anticipating oil shortages as economies around the world come back on line – BREATHTAKING. And, now we are beginning to come out of quarantine timidly and even fearful of the consequences – BREATHTAKING.
What is coming next? How much more can we bear? It’s unknown and we could be in for more volatility, protests, and maybe even an increase in Covid-19 cases.
But despite all of the bad news coming across our screens, there have been some valuable reminders and lessons learned as we think about the future:
- Never try to outguess the market especially when your emotions are heightened. Instead, maintain an appropriately diversified portfolio and remember that things are never as bad or as good as they seem at any given moment.
- There will always be crisis and recovery.
- The market hates uncertainty. That’s why we see big drops happen suddenly.
- Market gains usually precede everything being and feeling all better, no matter the crisis. That’s why we have seen such an extraordinary recovery.
- The media is no longer an objective source of reliable information and is in the business of viewership. Take what you hear with a grain of salt and instead look for more balanced views and those who display leadership rather than drama.
- World history has been shaped by human struggle and conflict. We live the wonderful life we do because of those who came before us and pushed through the messiness. We will eventually get through the present conflict as long as we are willing to listen, learn, work hard, and change.
There will be setbacks along the way with all of the above points, but, we will get through this together. Let’s hope for better days and please call is there is anything we can do for you.