The start of a new decade brought hope and inspiration for many, only to be shaken by what can only be summarized as unprecedented, including a global pandemic, social unrest, and a contentious election. And now, with 2020 nearly behind us, we can look forward to good things to come in the New Year, feeling stronger and wiser with the lessons we have learned along the way:
#1 Technology for Everyone
We were all forced to adapt quickly in March as daily life became confined to our homes. Zoom is now part of the American lexicon, and it’s here to stay. From the youngest students to the oldest clients, we were all pushed to pivot and accelerate into the digital age. As advisors, technology has only made us more efficient and productive, and even when COVID subsides, technology will remain a staple of our daily interactions with our clients.
#2 The Federal Reserve Playbook
In Q1, equities saw the fastest decline in market history. All fixed-income instruments were also hit with severe price dislocation due to a global liquidity crunch. Even US Treasuries—which are widely considered the most stable and liquid security in existence—saw unprecedented volatility. With lessons learned from the 2008 crisis, the Fed took action to steady the markets, quickly leading to resumed confidence and historic market high rebounds.
#3 Top 5 companies driving the market recovery
A handful of companies have changed the way we live, and during the pandemic, companies such as Amazon have exponentially benefited from our socially-distanced state. While, in our opinion, these companies are overvalued, Apple, Microsoft, Facebook, Google, and Amazon, are generating profits—unlike the dot com boom of 2000, when stocks were soaring on companies that were not profitable.
2021 Events to Come
Looming events in 2021 are poised to create continued volatility in the markets, including Brexit, a new COVID strain, and vaccine releases—just to name a few. While the outcome of the senate races in Georgia are still to be decided, the markets prefer a divided Congress, as history has shown us. A divided Congress means we are less likely to see large policy swings in either direction. The success of the vaccine rollout will also be a factor to watch. A smooth process with no disruptions in supply or adverse medical effects will continue to raise confidence and hope that even Main Street business will begin to thrive again.
Throughout all this uncertainty, some things have remained steadfast, including Beacon’s investment philosophy. Our Vantage portfolios held up extremely well during the pandemic and worked as they were designed to do—minimizing losses, maximizing diversification and maintaining mechanical execution to eliminate emotions throughout this year’s extremes. Our stop loss strategy protected clients on the downside, limiting losses in our mission to deliver consistent returns.
Our successes have been recognized with several honors, including being named to:
From all of us at Beacon, thank you for your continued trust and belief in us and our approach. Thank you for continuing to serve your clients, helping them navigate the many uncertainties this year has presented with confidence. We look forward to a happy and prosperous New Year together.
As always, please reach out to us at Beacon HQ to let us know as we can be of help. For additional ideas or recommendations on timely client conversations, feel free to contact your wholesaler or visit our Advisor Toolbox for a number of great resources.