Broker Check

2020 Halftime Huddle

July 20, 2020
Share |
Let's take a high level look at the first half of 2020. The chart below shows how asset classes performed in second quarter (on top) compared to first quarter (on bottom). While there are some differences - this rebound looks close to a mirror image and demonstrates the quick downturn and reversal we experienced.
Similarly, if Rip Van Winkle invested $1,000 into the S&P 500 index on January 2nd - only to fall asleep until June 30th - what would his experience have been? He would have woken up to an online balance of $969. While it's never fun to see an account value down - he would have slept through the low point of $696 on 3/23.
 
While we might be a little envious of Mr. Winkle's strategy - This is another great reminder that staying the course offers the best change at recovery from a correction. Short term performance will not make or break your investment goals. Acting on short term performance can be detrimental to your long term plans.
 
Looking forward to the rest of 2020, there has been a solid foundation built for the uncertainty that still exists with COVID-19 and the November election. With record levels of global fiscal stimulus, a continued low interest rate environment and low inflation the economy is poised to weather what comes next. Most importantly, we remain diversified and stay focused on our long term goals.
S&P 500 Index is an index of 500 of the largest exchange-traded stocks in the US from a broad range of industries whose collective performance mirrors the overall stock market. Investors cannot invest directly in an index. Diversification does not guarantee a profit or protect against a loss. Past performance is no guarantee of future results.