2020 was a year of change. But some things always stay the same.
- by Gillian Stovel Rivers, MA, CFP®, CEA
- December 7, 2020
On March 1st of this year, we officially became equal partners in this business. Two weeks later – as if we have to remind anyone – came the lockdown.
The markets plummeted: 34% in a 33-day period in February and March, the fastest bear market in history. What did it mean for you? What did it mean for us?
We have been reminding you for the past few years of the four most dangerous words in investing: “This time it’s different.”
What 2020 has reinforced so powerfully is that – when it comes to the markets, at least – this time, as always, it’s most definitely not different. True, COVID-19 has been what we hope is a once-in-a-lifetime event. True, the markets were extraordinarily volatile. But the crucial fact is that they have come back. Just as they always have and always will, over the long run. Even COVID-19 and the overall quite exceptional year that was 2020 couldn’t change that.
This is not to say that COVID-19-related volatility is behind us. We expect and are prepared for further ups and downs.
The takeaway is not only that the markets, over the long term, will always go up, but also that markets are unpredictable in the short term and cannot be timed. One of the very best investment strategies, therefore, is to stay calm, even when the markets are down in a very significant way. Our clients have demonstrated this calmness on multiple occasions – including in 2008 and 2018 – and you have certainly demonstrated that calmness here again in 2020.
Even when unexpected things like this are happening:
- The most significant health crisis in 100 years
- As we mentioned above, the fastest bear market in history: the S&P 500 went from an all-time high to a 34% loss in 33 days
- Oil prices going negative
- Mortgage rates at record lows
- Gold at all-time highs
- Trillions of dollars in monetary and fiscal stimulus coming online in record-breaking time
- People all over the world forced to work from home
- E-commerce experiencing a decade’s worth of growth in the span of three months
- And many more
All of that, and there are still people (not among our clients, or course) who think they can time the markets, or in other words, predict the future!
Now, at the date of writing, markets are back in positive territory – and 2020 could very well go down in history as the worst drop in a calendar year that finished higher than it started.
You have stuck with our plan. You have trusted our process. You have been disciplined. For all of these things and more, we thank you.
When it comes to our investing strategy, 2020 did not change the way we do things. But as we all know, this year has still been one of great change in other ways.
It has been a year of reflection. And of recalibration. Which, in a number of ways – despite all of the hardship imposed on many – has been very positive for us. And, we hope, in some ways for you.
In past years, when we have asked you about your biggest concerns, your primary focus has often been on the returns being achieved in your portfolios. Perhaps ironically, given this year’s extraordinary volatility, that was not nearly as much the case in 2020.
Instead, the major themes in our clients’ lives were family and staying healthy. You intended not just to survive the pandemic, but to have quality time – yes, often virtually – with your loved ones.
We also noted that many clients redeployed their spending. Whereas in past years, money would have been spent on travelling, funds this year were directed toward investing in your homes and helping family.
Another happy side-effect of summer travel restrictions was that we were in more frequent touch with you than any summer previous. You were around, we were around. We held a number of well-attended webinars, having to do, for example, with your investments and estate planning.
This year was also of course notable for widespread civil unrest in the United States, which, together with the US election, created some anxiety among our clients and was a conversation point you frequently raised. Now, with the election in the past, and a viable COVID-19 vaccine apparently on the way, conversations have become more optimistic. Which makes us very happy, especially considering the winter which will shortly be upon us and may prove to be a very challenging one for many people – in terms of social isolation in particular.
Let us be very clear: no matter what happens, we will be here for you. One of the great things 2020 gave us was the opportunity to think deeply about the unique value we offer, in the context of the branding exercise that resulted in the Surround Wealth Advisors name and our position: There’s more than one way to wealth™.
We arrived at these elements because we have the emphatic belief that since wealth is more than money – that wealth truly encompasses many aspects of life – we must go even deeper on our commitment to support you in every way you need it, and even in some ways you might not yet realize.
We can assure you that your future plans remain on track. That we will stay connected with you. That we will always be here to talk or address any concerns you may have, on any topic, and that you are never alone.
This holiday season is going to be different. On behalf of the entire Surround team, our wish for you is that you find moments of joy in it, and start 2021 with a fresh outlook and optimism that a Happy New Year is indeed ahead.