Well … it’s the last day of the year and while many of us will curse 2020 for the ills brought upon us, many years from now investors … looking strictly at market gains … might consider the year to be a good one. And who can blame them? With a few hours to go before we close the books on another calendar year the S&P 500 Index is showing a total return above 17% … though with all that continues to go on with the virus, no one seems to be in a celebratory mood.
I wondered about this … and looked up market returns during other periods of strife … and was very surprised to see above-average market returns (source: Advisor Channel) in the throes of the Civil War (1862, 1863, 1864), World War I (1918) and World War II (1942, 1943, 1943). What does this mean? I’m not entirely sure. Maybe it means the non-emotional market takes a cue from Admiral Farragut as it announces, “damn the problems, full speed ahead.”
Employment numbers released this morning showed first time claims to be better than analysts expected … but, again, leave the champagne in the fridge for this is still three-and-a-half times higher than it was just one year ago (which seems so much longer than that).
I also saw a report on Bloomberg that claims – even in the face of incredibly low interest rates, homebuyer affordability is the worst it has been in over 12 years (as prices are outpacing earnings). I do implore many of you to do one thing, though. Look over what you are paying for a mortgage (the rate). I did my own and was surprised that even with costs and fees added back in … and using the present time period left on my mortgage … I can save $200/month. And I freely give my opinion that once this virus is behind there is quite a chance that inflation could rear its ugly head … and drive rates back up.
So now I look forward to 2021 and think of all the wonderful things that lie ahead. I imagine continuing advancement in fuel cells, electric cars, pro-environment issues, internet speed and … importantly … things that keep us safe on the internet (as cybercrime seems to be ramping up).
I hope everyone has a wonderful evening tonight as we keep in mind that we sacrifice being close to one another tonight so that we can celebrate with each of our loved ones tomorrow … with nobody missing.
And what a happy celebration that will be.
Wishing you a great day and a wonderful new year ahead.
Joseph G. Witthohn, CFA
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
cell: (856) 625-7915
… As of 11:47 AM today …
Quick Look at the News
Unemployment numbers came out for last week but, while the result was better than expected, does this portray good news or show us that analysts are overly pessimistic? (CNN)https://www.cnn.com/2020/12/31/economy/unemployment-benefits-coronavirus/index.html
The year did supply some interesting developments … and one was the relaxation of rules regarding cannabis. But does collective acceptance mean more danger on the highway? (USNews)https://www.usnews.com/news/health-news/articles/2020-12-30/with-pot-rules-relaxed-more-us-teens-driving-while-high-study
Today, of course, is New Years Eve … and quite a few of us will consider resolutions. If short of ideas, here are 50 … and how we might go about achieving them (LifeHack)https://www.lifehack.org/articles/communication/50-new-years-resolution-ideas-and-how-achieve-each-them.html
We seem to want to make the world better, yet it is tough because much is hidden. One girl scout examined the ingredients of the cookies she sold … and realized child labor was used (AP)https://apnews.com/article/palm-oil-forests-indonesia-scouts-83b01f2789e9489569960da63b2741c4
… for without a plan in mind (and adequate resources) it will be tough to improve things. Many went into 2020 wanting to slow the world’s climate decline. It was another year wasted (CNN)https://www.cnn.com/2020/12/30/world/climate-change-2020-wasted-year-intl/index.html
But I might as well end on a happy note … and the video in this article of robots dancing certainly fits the bill … and “Dancing with the Bots” will probably be streaming soon (FoxBusiness)https://www.foxbusiness.com/technology/boston-dynamics-robots-bust-a-move-in-new-viral-video-celebrating-the-end-of-2020