Joseph G. Witthohn, CFA
VP of Product Development Emerald Asset Management

Good morning.

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
Vice President
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 …

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