2020 was the worst?
It certainly was challenging. Remember how I have often complained about how boring and stable the markets have been the last 12 years since the Great Recession? This last year was many things, but boring was not one of them.
The surge of COVID-19 infections overwhelmed healthcare systems across the globe, quickly rippling through most sectors of the global economy, and causing a cascade of economic disasters. This led to record deficits, bulging national debts, and the fastest mass layoff in history. The shortages in basic goods were daily reminders of our "new normal" which was exacerbated by selfish acts of the few. What has been dubbed the "COVID Crash" led to our first recession in 12 years. This does not even begin to cover the other devastating effects caused by COVID, such as the isolation, division, and damage to society as a collective.
However, our complex systems functioned as they were designed to in crisis. The Federal Reserve invented new methods to stabilize the Capital Markets. Corporate America quickly cut expenses, took advantage of low interest rates, and preserved their sustainability and profit. The US legislative branch crossed the aisles and passed the Cares Act, providing a plethora of aid programs. Military units across the country were activated to help with healthcare, contact tracing, and logistics. Little known agencies of our government, like the Small Business Administration, sprang into action, reminding us of their purpose, much like the airbag in your car that rarely gets the attention that it deserves. Most impressive however, were the everyday acts of kindness and heroics of our fellow humans. We were reminded that our economy, government, and people have been through worse in the last 244 years and continue to be resolute.
The steep contraction of the global economy did not prevent many corporations from prospering and, as investors, we are thankful for a profitable year in the markets. We were even able to take advantage of the turbulent economic weather to provide tax benefits and increase future potential. The three tax overhauls in the last thirteen months ended some of our strategies but allowed me to invent new strategies and enhancements for more tax efficient plans. Unfortunately, some citizens were left behind by this recession and unable to benefit by the chaotic opportunities presented. We wish there was more that we could do for them.
Emilia Poesy Brown (who recently informed me that she would be a financial planner and take over when I was too old) described 2020 as a "sea rollercoaster." I think she meant that it was a terrifying, elating, and ultimately profitable experience. However, it is not a ride that anyone is ready to repeat anytime soon but one that we all shared and hopefully learned from. Dean started the year relatively mute and, after all the extra time with Poesy and I, now will not stop talking. The extra time isolating with my wife, Dr. Brown (who has been going into work at the hospital daily and has been vaccinated without turning into a zombie - phew), and the children has enriched my view of the world. We may all benefit from taking a moment to reflect on the good that came from 2020.
So, 2021 is here and barring a space alien invasion, promises to be more predictable than 2020. I am cautiously optimistic. We look forward to seeing you at your upcoming comprehensive review. We are ready to update your goals and ensure that your plan and portfolio support your intentions. Happy New Year and as always, I am here to help. 2021, we are ready for what you have to offer. Trust our experience and processes to see us through another year.
Thank you for everything that you do and are,
Dustin Mac Brown CFP® AAMS®
"Daddy, don't you know there are no good things or bad things? Just things in the wrong place or used wrong".
Emilia Poesy Brown, Insightful @ age 6.