2020 – A Mixed Bag!
What a rollercoaster of a year 2020 has been. Although I definitely don’t need to remind anyone about what headlines dominated this year, we should always still take the time to reflect on what has transpired throughout the year.
One thing 2020 should have taught everyone, is to expect the unexpected. Nothing can ever be fully predicted or relied on, and we should always be positioning ourselves for an unlikely and unexpected events.
After all, who’d have expected a global pandemic to pop-up out of nowhere?
It is for this reason that all portfolios need adequate levels of diversification – an ability to be able to have exposure to all different markets and their growth and recoveries.
In terms of financial markets, they have well and truly lived peaks and troughs this year. The year started extremely strong in January and February, with the Australian Market growing 6.5% from the 1st January to February 20th, and the US Market increasing 3.8% over that same period. A promising start.
From that point, COVID was declared a pandemic and markets well and truly panicked – the Australian Market dropped 37% between February 20th and March 23rd, with the US Market decreasing 34% in the same period.
Following this low, the world began to start adopting to COVID norms, and the market began a recovery. At the date of writing this email, not only has the US Market recovered fully from its downturn, it is up 13% on the start of the year.
Whilst the Australian Market is having a strong end to the year (including just having its best November month ever) it is still dragging it’s heels and working on recovering to its pre-COVID levels. This is due to the makeup of our market; as it is disproportionately weighted in banks and resources, which are two sectors that are still under the stress and pressure of COVID, it has had a slower recovery than the tech-heavy US and Asian Markets.
While we have recovered to the levels at which we started the year, we do still have a little more to go before reaching the pre-COVID highs of February 20th, however if we do happen to continue on the current trajectory, the Australian market will reach, and potentially exceed, those levels in no time.
On a more personal note, I will taking a break and spending some time with my family from the 18th of December until the 11th of January. I will be checking emails and voicemails during this time, so please don’t hesitate to reach out with anything urgent.
Finally, I just wanted to take the opportunity to thank you for your support this year. It has been a tricky year for us all, and I am privileged to have been able to work with you during these un precedented times.
I want to wish you and your family an amazing Christmas, and a Safe, Happy and Prosperous 2021.
The information provided in this email must only be considered general advice. It has been prepared without taking into account any persons individual objectives, financial situation or needs. Before acting on anything in the article, you should consider its appropriateness to you, having regard to your objectives, financial situation and overall needs.