This year typified the term, “roller coaster ride”

In the first quarter of the year, we saw steep losses in the markets through March.  Through 3/23/20, the S&P was down -28.66%. the EFA Index was down -33.04%, and the Russell 2000 Value down -44.17%! And much of that activity occurred in a few weeks in March. For many, it was a terrifying two weeks.

But beginning in April, for no apparent reason, a turnaround began. From 3/23/20, there has been an incredible rebound, intensifying after the election. From that date through 12/3/20, the S&P 500 is up 60.49%, and the EFA Index is up 52.88%. But the asset classes that most people have avoided, are up even more. International Small is up 74.49%, and the Russell 2000 Value Index is up 71.57% in just a few months.

Over the same period, our investors have participated in that rebound strongly. The FMUEX, the US stock fund in Matson Money portfolios, is up 73.48%. FMNEX, the international stock fund is up 66.34%.

What are the morals of this story?

Don’t panic, stay the course, and the market will never cease to surprise investors. Going back to March, the market fell at amazing speed. But then who saw this lightning-fast recovery? And again, pundits were predicting market declines after the election based on certain outcomes, yet November has been the strongest month this year (both FMNEX and FMUEX each returned over 15% in ONE month).

No one can predict what 2021 will bring

However, if we look back at the past market declines there is reason for optimism. The crash of 1987 (Black Monday) was also a very sudden market decline, like this March. Five years later from that decline, a balanced portfolio of 60% stocks and 40% bonds was up 76%. Five years after the Great Recession crash (Sept 2008), that same portfolio was up 47%.  For those who weather the storm, many times there are strong returns on the other side.

We hope to see you at our 2021 events. Please contact us at any time with questions or concerns.