by Scott Ronalds
2020 will forever remain etched in our memory (along with its catchphrase, “You’re on mute”). It was a year that turned everything upside down. I won’t recount all the carnage (economic and otherwise), but suffice to say, it was a trying period for individuals, businesses, and hospitals around the globe.
Thankfully, it will soon be over. There are brighter days ahead. And surely, some good will come from the hardship we’ve all had to endure. Companies have adapted in creative ways. New processes, perspectives and technologies have been implemented. Scientists have developed a vaccine in record time and have an expanded knowledge base that could be applied to other diseases. And we’ve all spent more time outside.
From an investing standpoint, we haven’t seen anything like it since 2008. Volatility was rampant, fear palpable, declines staggering, and confusion widespread in both periods. The rebound this time around, however, has been much quicker.
For all the vagaries of the year just passed, one thing turned out to be fairly normal: your returns. Overall, balanced portfolios fared quite well in 2020. With one day left on the calendar, our Founders Fund is up over 8% (we’ve been counseling clients to expect returns from a balanced portfolio in the neighbourhood of 4-5% per year over the medium term). Go figure.
As we’ve said time and again, investing is perverse. Stock moves can be way out-of-synch with the economy and nobody can consistently predict the market’s near-term path. Over time, though, the trend is up and to the right — which makes sitting tight and sticking to your plan the most viable strategy, albeit boring and at times terrifying.
Tomorrow is New Year’s Eve. Like everything in 2020, your celebration will likely be different than years past. Take the time to enjoy it though. I, for one, have a date with my wife, the couch, and a special bottle of champagne we’ve been saving for a while to toast the end of a long year. Fittingly, it’s from 2008.
Auld lang syne.
[Management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The indicated rates of return are the historical annual total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns.]
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