Daily Capital

December Market Recap: 2020 Wraps with Stock Optimism

With election jitters fading and the kick-off of vaccine rollouts, enthusiasm for stocks continued unabated in December, capping a dramatic year for capital markets. U.S. stocks, once down over 30%, finished 2020 up over 20%. Small caps, battered in the downturn, roughly doubled from the bottom through the end of the year.

In a turbulent year, sticking with a diversified strategy has once again proven to be a successful approach. Those who reacted emotionally or attempted to time the market typically fared poorly. Speculators and stock pickers had mixed results. Some are emboldened by gains in high momentum stocks. We urge caution for those using leverage and those concentrated in individual companies or sectors.

Moving into the New Year

As 2021 gets underway, an apparent surprise sweep of Georgia’s two Senate runoff elections by Democrats completes a mild version of the Blue Wave some anticipated prior to the election. Early market reaction signaled support for the “reflation” trade, with economically sensitive sectors responding positively. With increased possibility of more stimulus and more debt, Treasuries retreated and the 10 Year Treasury yield rose above 1% for the first time since March.

The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.

Craig Birk leads the Personal Capital Advisors Investment Committee and serves as Chief Investment Officer. His focus is translating improvements in technology into better financial lives. Craig has been widely quoted in the Wall Street Journal, Bloomberg, CNN Money, the Washington Post and elsewhere. Prior to Personal Capital Advisors, he was a leader within the portfolio management team at Fisher Investments, helping assets under management grow from $1.5 billion to over $40 billion. Craig graduated from the University of California at San Diego and has earned the Certified Financial Planner® designation.
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