Investment Market
Commentary
January 2021, 4th Quarter Investment Market Review

Using the S&P 500 stock index as the gauge, 2020’s market performance was nothing short of spectacular considering the backdrop of COVID-19.  From the market low on March 23 through December 31, the S&P 500 stock index returned about 68%.  For the entire calendar year 2020, the S&P 500 stock index returned 18.4%, well above the average annual historical return of about 10%.  These results reinforce our strong belief that panic selling never pays off.  The true key to successful investing is sticking with a sound strategy and financial plan over the long-term, through good times and bad. Those who succumb to panic invariably do more harm than good.

As we often remind our clients, it is counterproductive to concern oneself with year-to-year market gyrations. We recommend a long-term perspective for all investors (3-5 years minimum). Those who constantly attempt to shift out of the stock market when the market is experiencing “despair” and into the stock market when it is experiencing “euphoria” often miss out on the benefits of long-term investing.

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