Benchmark Returns for the Period Ended
December 2020
| Quarter | Annualized | |||
|---|---|---|---|---|
| 1 Year | 5 Year | 10 Year | ||
| US Treasury Bills (one month) | 0.02% | 0.44% | 1.07% | 0.55% |
| Barclays Capital US Gov’t/Credit Inter Bond | 0.48% | 6.43% | 3.64% | 3.11% |
| Standard & Poor’s 500 | 12.15% | 18.40% | 15.22% | 13.88% |
| Russell 1000 Value (large cap value) | 16.25% | 2.80% | 9.74% | 10.50% |
| Russell 2000 (small cap) | 31.37% | 19.96% | 13.26% | 11.20% |
| Russell 2000 Value (small cap value) | 33.36% | 4.63% | 9.65% | 8.66% |
| MSCI Europe, Australasia and Far East (EAFE) | 16.05% | 7.82% | 7.45% | 5.51% |
| MSCI Europe, Australasia and Far East (EAFE) Small Cap | 17.27% | 12.34% | 9.40% | 7.85% |
| MSCI Emerging Markets | 19.70% | 18.31% | 12.81% | 3.63% |
| Wilshire REIT | 10.62% | -7.90% | 4.25% | 8.27% |
| Source for returns: Morningstar TM as of 12/31/2020. | ||||
Quarterly Commentary
The fourth quarter saw equity markets continue their strong run following the March 23 lows. Domestic small and small value stocks led the way, returning 31.37% per the Russell 2000 Index and 33.36% per the Russell 2000 Value Index. They were followed by emerging markets (per the MSCI EM Index) with a 19.70% return. International developed markets (per the MSCI EAFE Index) and domestic large company stocks (per the S&P 500) also had positive performance, returning 16.05% and 12.15%, respectively.
As we close out 2020, the famous Charles Dickens quote, “It was the best of times, it was the worst of times,” seems fitting. From January 1 to March 23, domestic large company stocks were -30.43%, emerging markets were -31.80%, and domestic small value stocks were -44.32%. What followed was one of the quickest and sharpest recoveries in equity market history, with these three respective indices returning 65.19%, 63.77%, and 83.02% from the March lows through the end of the year. To say 2020 was a wild ride in equity markets would be an understatement.
The year opened with an impeachment. Then came an ongoing global pandemic, unprecedented job losses, social tensions, extraordinary federal aid, and a subsequent and continuing economic recovery. Finally, 2020 topped off with the conclusion of a contentious presidential election. What did equity markets do? Advance to all-time highs in the final days of the year.
In our summary of 2020, we don’t intend to understate or ignore the genuine uncertainty about the economy. We continue to mitigate COVID-19 and still don’t know when and what “normal” will be. Then again, the market and the economy never offer any guarantees. If anything, we currently find ourselves in a situation where the uncertainty is more illuminated than usual – ignorance is bliss, as they say.
As we move forward into a new year, please don’t hesitate to reach out if you have questions about these reports or your financial objectives and goals. We hope to provide some peace of mind to you and your family and look forward to serving you for years to come.If you have thought about becoming a client or would like a second opinion on your current holdings, please contact us via the button below and we would be glad to assist you in achieving your financial goals.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Indices are not available for direct investment; therefore their performance does not reflect the expenses associated with the management of an actual portfolio. The index returns above assume reinvestment of all distributions. This information is for educational purposes only and should not be considered investment advice or an offer of any security for sale.
