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Happy Coronavirus Anniversary!? One year has passed since the novel coronavirus, Covid-19, was disclosed to the world, launching an era of quarantines, masks, and uncertainty. With the onset of related uncertainty, financial markets responded, ironically, as expected. Stock market volatility ensued as limited, changing information was digested in rapidly declining stock prices (and increasing high-quality bond prices…). The resounding question was whether or not this financial recession would be different. Many, including the media, opined on the reasons this time would be different, but we didn’t fall into that trap. As time marched on, the world learned and adapted, and we stuck to our plan—or better said, 994 Group clients stuck to their plans. The causes of recession are often different… geopolitical unrest, market bubbles, financial system failure… But regardless of the recession or its cause, the human spirit endures with resiliency and positive momentum.
So, let’s reframe the conversation. 2020 delivered the best single-day return in the stock market since 1933, when the DJIA® increased over 11%. Global healthcare systems rallied to create multiple vaccines at a historic pace allowing for a rapid approach toward herd immunity. Business owners across the globe adapted to work-from-home environments, concluding the year with a positive forward-looking outlook. Perseverance and agility sustained us through the worst of the pandemic. So, while masks and quarantines are still a part of daily lives, the disruptive fear of the great unknown has substantially passed, and the road to recovery is well on its way. The following points provide more context for the recovery.
The problem with trying to make decisions with a crystal ball is that it usually just results in walking on shards of glass. We evaluate current events, not so we can make decision based on what might happen next, but rather to provide context for what they mean… and what they do not. We cannot predict the future; we can only focus on the things we can control. So, stick to your plan, your budget, your savings, your joyful life! And, when you experience one of life’s inevitable changes, we’ll be ready to make adjustments with you!
Sources: First Trust Monthly Talking Points March 2021, First Trust Unemployment Watch April 2021, cnbc.com ‘A year ago, women outnumbered men in the workforce, not they account for 100% of jobs lost in December’ January 11, 2021, Dimensional Fund Advisors, Finance.yahoo.com, Morningstar.com
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Indices are unmanaged and investors cannot invest directly in an index. Unless otherwise noted, performance of indices do not account for any fees, commissions or other expenses that would be incurred. Returns do not include reinvested dividends.
Barclays U.S. Aggregate Bond: The Bloomberg Barclays U.S. Aggregate Bond Index is an unmanaged index of fixed rate debt securities rated investment grade or higher by Moody’s, Standard & Poor’s, or Fitch rating services. All issues in the index have at least one year to maturity and an outstanding par value of at least $25 million to $1 billion based on the type of security. Indices are not available for direct investment and do not reflect any fees that may be charged.
S&P 500®: The S&P 500® index is an unmanaged index of 500 companies used as a representative sample of the United States economy. The S&P 500® index consists of only stock holdings. Indices are not available for direct investment and do not reflect any fees that may be charged.
MSCI Ex-US: The MSCI Ex-US index is an unmanaged index used as a representative sample of the global developed economy outside of the United States. The MSCI Ex-US index consists of only stock holdings. Indices are not available for direct investment and do not reflect any fees that may be charged.
MSCI Emerging Markets: The MSCI Emerging Market index is an unmanaged index used as a representative sample of the global emerging market economy outside of the United States. The MSCI Emerging Market index consists of only stock holdings. Indices are not available for direct investment and do not reflect any fees that may be charged.
DJIA: is an unmanaged index of 30 companies used as a representative sample of the United States economy. The DJIA index consists of only stock holdings. Indices are not available for direct investment and do not reflect any fees that may be charged.
Russell 2000: The Russell 200 index is an unmanaged index of the 2000 smallest companies in the Russell 3000 index. The Russell 2000 Index is used as a representative sample of the small companies in United States economy. The Russell 2000 index consists of only stock holdings. Indices are not available for direct investment and do not reflect any fees that may be charged.
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