(Newswire.net — January 26, 2021) — On December 31, 2019, people around the world celebrated and rang in the new year with friends and family. Many businesses had exciting growth plans, and families had trips booked. It was a new decade with endless possibilities. Within days, news coverage in America started showing Wuhan, China’s dire state, and the virus that was spreading. For a brief moment, it had seemed like the virus was isolated to China; however, with news of cases showing up in countries around the world, we soon realized we were dealing with a global pandemic.
The real and only MVP of 2020 was the word ‘unprecedented.’ A word that best describes the events of the past year, and according to Oxford Dictionaries, has been used 57,000% more than in 2019. Unprecedented means “never done or known before,” and it’s true. Last year we witnessed significant historical events occurring every month! In addition to a global pandemic, protests over racial injustice ensued around the world, and the U.S. presidential election picked up momentum, often exhibiting chaos, division and destruction.
Historical events, like those experienced in 2020, have a ripple effect. The socio-economic impact is significant. Less than a month into the new year, and we are still experiencing the same events of 2020, making it hard to capture the impact in a quantifiable way. That said, thanks to financial planning and investment management firm, Fragasso Financial Advisors, we can see the economic impact these events have had on the stock market. Here are a few examples:
- April: The world remained in lockdown and online shopping increased. As a result, Amazon’s sales increased to $75.5 billion, a 27% increase.1
- June: States started to open up again slowly, and S&P 500 rallied 2%, and overseas markets roared upward by 7.36%.2
- November: The presidential election saw delays in vote counting and reporting and an increase in confusion and media attention. But with whispers of a vaccine in the near future, the S&P was up 10.95%, and international developed markets were up 15.5%.3
For a more comprehensive monthly timeline, check out their blog post. In the two-part series they have outlined the significant events that occurred and corresponding market performance.
We’ve all heard the saying, hindsight is 20/20, meaning when you look back, you have a clearer understanding of how things should have been handled or what could have been done. When you look back on 2020, are there things you should have done differently or handled better?
Possibly, but many things still remain unpredictable, and it’s hard to make these statements. The past doesn’t always predict the future, especially in finance. That said, looking back on the financial impact, the monthly events of 2020 can help us better understand their relationship and how they are connected. Two weeks into 2021, and we have already experienced more unprecedented events. Although many of us are longing for those “precedented” days, we can learn and grow from these experiences to better our financial future.
1 https://www.nytimes.com/2020/04/30/technology/amazon-stock-earnings-report.html
2 Sources, Morningstar Direct. ®
3 Sources, Morningstar Direct. ®
Investment Advice offered by Investment Advisor Representatives through Fragasso Financial Advisors, a registered investment advisor. Securities offered by Registered Representatives through Private Client Services, member FINRA/SIPC.
Investment in the portfolios mentioned in this document may not be suitable for all investors. Past performance is not a guide for future performance and should not be the sole factor in consideration when selecting investments.