2020 is officially in the books. What an interesting year! You aren’t here to rehash those things though. Instead, let’s get right to the highlights of the market. Hold on!
- The S&P500 was up roughly 16.25%. Hard to believe it with being down 34% at one point.
- The year end was where all the growth happened. It was up 15% in November and December. So, 1.2% for the remainder of the year.
- Large Cap Growth led the way of major US classes with growth of 38.5%. Large Cap Value brought up the rear at 2.8%.
- Basically, Growth dominated Value once again across Large, Mid and Small Cap companies.
- From the low in March, Small Growth was up 108.2%. This was the leading asset class.
- Tesla was the best performing of the S&P500 stocks being up 743%. Bubblicious!
- For 10-year numbers, Large Cap Growth again leads the pack with annual growth of 17.2%. Small Value brings up the rear at 8.7%. Again, Growth outpaces Value over the last decade. Again & Again, I wonder how all the Dimensional Fund investors are feeling?
- For sectors, Online Retail led the way with performance of 69%, outpacing Information Technology that gets all the attention at 44%. Energy brought up the rear at -34%.
- Looking at the history of Bear and Bull markets, this was the shortest Bear market since 1929 at only one month in duration. It sure felt like the longest month, but maybe that was just me.
- We also saw the end of the longest Bull market in March that had lasted 141 months. The S&P500 grew 401% during this period. It was not the highest growth Bull market, which belonged to the one starting in 1990 that saw growth of 417% and was 28 months shorter in duration.
- Unemployment hit 14.7% in April. It now resides at 6.7%, which is above the 50-year average. Wage growth is currently above average at 4.5%.
- The more education the better the employment and income numbers. I don’t think this is a surprise to anyone.
- As a sector, Leisure and Hospitality represents the largest of the primary employment sectors that has been hit hardest by unemployment. This sector still has a ways to go to recover.
- As of November, inflation is still tame at 1.2%. This is the same as October.
- In the past during low and rising inflation environments, Gold and Emerging Market equities did the best while Cash and Bonds did the worst.
- For 2021, the Fed is forecasting GDP of 4.2%, Unemployment of 5%, and Inflation to stay below 2%.
- The Federal Budget Deficit hit a high of the last 30 years of 15.2% of the GDP. The Deficit has only gone up since 2016!
- Here is a link to an article by VisualCapitalist on how every asset class, currency and S&P500 sector performed last year. Interesting stuff and great visual format.
My final thought. If you had been completely out of touch for the year and looked at your portfolio you would probably be rather happy. The S&P500 was up over 16% and even a boring old 60/40 portfolio was up nearly 12%. I’m sure there is a lesson or two here about focusing on the long term, but I will keep my soapbox away for now. Happy New Year!!!
I’m Dan Johnson, CFP®, founder of Forward Thinking Wealth Management. I run a flat-fee financial planning and investment management firm located in beautiful Akron, OH. Although I am in Akron, OH, I work with clients regardless of location. I cater to owners of equity compensation positions who are looking to organize their financial lives, keep more of what they make, and do the things they want in retirement and even now.