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The Markets
2019 will be a hard act to follow.
Investors may find themselves reluctant to ring out the old and ring in the new this week. During 2019, stock and bond markets delivered exceptional returns.
Ben Levisohn of Barron's reported the Dow Jones Industrial Average was up 23 percent at the end of last week, the Standard & Poor's (S&P) 500 Index had gained 29 percent, and the Nasdaq Composite was up 36 percent. The S&P 500 and Dow both closed at all-time highs.
Bond indices showed gains in the United States and around the world. The Bloomberg Barclays U.S. Aggregate Total Return Index was up 8.87 percent at the end of last week. Its global counterpart, the Bloomberg Barclays Global Aggregate Total Return Index, was up 6.63 percent for the same period.
After a year like 2019, when stock indices delivered exceptional returns, investors' perceptions about their appetite for risk can change. Great market performance has a way of persuading people their tolerance for risk is higher than it has been in the past. The phenomenon has something to do with recency bias, which is a tendency to remember and weight recent events more heavily than past events.
In other words, during bull markets some people tend to forget about bear markets.
2019 was a wonderful year, but not every year will be like 2019. At the end of last week, the average annual return for the S&P 500 Index over the last 60 years, with dividends reinvested, was about 9.5 percent.
The fact that 2020 may not be like 2019 does not mean it's time to sell. Successful financial plans and investment strategies should include well-diversified portfolios that are grounded in the investor's life and financial goals. Every strategy and portfolio should be reviewed periodically and modified when goals have changed, a major life event has occurred, or the investor's risk tolerance has changed.
If you would like to talk about your strategy and review your portfolio allocations, give us a call. We'd like to hear from you.
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Data as of 12/27/2019
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1-Week
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Y-T-D
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1-Year
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3-Year
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5-Year
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10-Year
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| Standard & Poor's 500 (Domestic Stocks) |
0.6%
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29.3%
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30.2%
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12.6%
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9.2%
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11.1%
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| Dow Jones Global ex-U.S. |
0.8
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18.6
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20.6
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7.6
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3.1
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2.8
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| 10-year Treasury Note (Yield Only) |
1.9
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NA
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2.7
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2.6
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2.2
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3.8
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| Gold (per ounce) |
2.2
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17.9
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19.2
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10.0
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5.0
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3.2
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| Bloomberg Commodity Index |
1.2
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6.0
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4.6
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-2.4
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-5.2
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-5.3
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How Do You Celebrate The New Year?
From early Babylonians to present-day Americans, people have been celebrating the beginning of every New Year for almost four thousand years! Here are a few ways people celebrate the holiday in the United States:
- 61 percent of American adults say a prayer on New Year's Eve
- 44 percent plan to kiss someone at midnight
- 22 percent fall asleep before the New Year arrives
- 45 percent make resolutions to lose weight, spend less, save more, etc.
- 73 percent keep their resolutions for less than two days
One million people gather in Times Square and 2,000 pounds of confetti fall on their heads. One billion people around the world watch festivities on television. Ushering in the New Year is a momentous event.
If you have any momentous events in your life - marriage, birth, death, divorce, or something else - please let us know. We want you to be secure financially as momentous changes can alter financial plans.
We wish you a Happy New Year!
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Weekly Focus - Think About It
"I hope that in this year to come, you make mistakes.
Because if you are making mistakes, then you are making new things, trying new things, learning, living, pushing yourself, changing yourself, changing your world. You're doing things you've never done before, and, more importantly, you're doing something.
So that's my wish for you, and all of us, and my wish for myself. Make new mistakes. Make glorious, amazing mistakes. Make mistakes nobody's ever made before. Don't freeze, don't stop, don't worry that it isn't good enough, or it isn't perfect, whatever it is: art, or love, or work, or family, or life.
Whatever it is you're scared of doing, do it.
Make your mistakes, next year and forever."
--Neil Gaiman, Author
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