Message from Jon
We are finally seeing the COVID spikes over the holidays being reacted to adversely in the markets Monday with a selloff that is stretching the indexes downward over 1% by midday. We were actually surprised that this did not happen sooner with the UK mutation of COVID bringing a more severe lockdown in December.1
Of course, this does not at all change our thoughts about how 2021 should shape up to be a better year than 2020 was. We are still moving ahead with our January rebalances and putting our cash to work. Conversations this morning were spent around inflation concerns and how portfolios will respond should inflation heat up faster than expected.
We are already seeing inflation impact car sales and stock prices. As a team, we are preparing portfolios and analyzing which areas or assets will do poorly and which ones will do well during the inflationary times we are certain to see.
No, we are not thinking the markets are going to tank in 2021 because a democrat is in office or because of the election outcome in Georgia or since the markets are at all-time highs and therefore must go down or because we might have some mutated strain of COVID in the US now (which if I am a betting man, we probably already do). Again, these are geopolitical, societal and healthcare concerns and not necessarily what Wall Street is paying attention to or reacting to.
Now more than ever, you need to double and triple check and even then, second guess the information you are reading and hearing in the media. The deep fake videos and disinformation that is out there is quite frankly, mind numbing and for many, very debilitating... It will hijack your emotions and cause you to have unrealistic expectations or assumptions that you may end up getting hurt by in the long run.
Till we speak again, be safe, mask up and say no to negative energy this year!
The Year in Review
WEEKLY UPDATE - JANUARY 4, 2021
The Week on Wall StreetStocks moved higher during a holiday-shortened week of trading, capping off a turbulent, but otherwise strong year for equity investors. The Dow Jones Industrial Average gained 1.35%, while the Standard & Poor's 500 increased by 1.43%. The Nasdaq Composite index, which led all year, added 0.65%. The MSCI EAFE index, which tracks developed overseas stock markets, rose 2.02%.