Fill in the blank. However, anyone describes 2020, they’re probably right. But, as the year does draw to a close, there are lots of positives. Back when we were all introduced to a new word, coronavirus, I wrote that, when we get through this, a newer economy would emerge, and American ingenuity would step up and move us all ahead. And that is exactly what’s happening.
Equity markets are forward-looking and estimate the future cash flow values. With extremely rock-bottom Treasury bond yields, low global bond yields, pledges by global central banks to hold rates near zero for the foreseeable future, and a growing economy that lends support to corporate profits have been a strong tailwind for equities this year. With Treasury yields below 1% the S&P 500 dividend yield is above Treasuries, which does encourage savers to look outside of bonds for income and return. The attached article about the Fed raising estimates for GDP this year and next is a good summary about their take on inflation and next year’s potential GDP growth.
I remember it wasn’t that long ago that there was a drive to buy Christmas gifts that were made in the US. It seemed that everything was coming from China. If anything, 2020 was a wakeup call that the United States needed to be a lot more self-sufficient and bring manufacturing back home. And that too, is what is happening. The second article attached is a real good read about what’s happening in the manufacturing industries. I hope you get a chance to read it.
Finally, Jean & I would like to leave you with our Christmas message. One of our favorite Christmas movies is the classic “It’s a Wonderful Life”. I’m sure you know about George Bailey and the fictional town of Bedford Falls. Through a series of events, George becomes disillusioned with his life and wants to end it. Eventually, George discovers that he has touched many people in ways that wealth and fame never could. So, as 2020 comes to a close, let’s all take a moment to remember the meaning of the holidays and how people reach out and touch others without even knowing it. Jean & I hope you have a very Merry Christmas and a happy holiday season.
Stay safe and, as always, should you have any questions or wish to speak with me, please call or email so we can put something on the calendar.
I’ll pick this weekly email back up in 2021.
PS: This is not an offer to buy or sell securities. No investment process is free of risk, and there is no guarantee that the investment process or the investment opportunities referenced herein will be profitable. Past performance is not indicative of current or future performance and is not a guarantee. The investment opportunities referenced herein may not be suitable for all investors.