A New Year's Wish for Normal
2020 was a year like no other. There were some bright spots, of course – most notably the very strong performance of the stock market. But for the most part, we seemed to spend much of the year lurching from crisis to crisis, with rising death counts, closing schools, growing unemployment. As we move into 2021, many of us are hoping mostly for a more normal experience.
This January 20, at the inauguration of President Joe Biden, we witnessed the peaceful transition of power – something our country has done since its beginning. We are hoping to see more of that normalcy begin to creep back into our lives, starting with getting COVID-19 under control. We look forward to people getting back to work, children going back to school, sports being played in front of cheering fans. We look forward to seeing people we love, and being able to hug them and laugh with them.
We want to go back to when most of our surprises were good ones, when life was more predictable – maybe even a little boring. We have had enough of the "new normal." We want the old normal back.
And despite the fact that the Dow Jones Industrial Average set a new record at year-end, it also was one of the most volatile years in market history. Stocks plummeted with bad news about the virus and the economy, and rebounded on news that offered hope. In 2020, the Dow experienced 14 of the 17 largest single-session point drops in its history, and eight of the nine largest single-session jumps.
So what will happen in 2021? No one knows, of course. In general, the market is calmer when there is less uncertainty around it. But if 2020 has taught us anything, it is not to put too much faith in what generally happens.
At Peachtree Investment Partners, our investing approach remains consistent, whatever is happening around us. We focus on the stocks of large American companies that have strong and experienced leaders. We choose companies with good return on investment and a long history of consistency in revenue and earnings growth. We believe in dividends because over time, reinvested dividends can help to grow your portfolio significantly. And we believe in investing for the long term. Time after time, history shows us that the vast majority of investors who try to time the market find that their timing is off; they either get out or get back in – or both – at the wrong time.
We wish all of you the blessing of a new year. May you be healthy and happy, less stressed and more hopeful. As always, don't hesitate to call if you want to discuss your investments or if there is anything else we can do to help you.
Garry K. Schaefer
Atlanta, Georgia
January 26, 2021
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