2020 Recap – The GOOD

Happy New Year! I hope you and your family/friends were able to make the most of our situation known as “2020” to include the holiday season.

At the risk of sounding cliché, the year 2020 will be remembered throughout history as one of the most unpredictable and challenging years of most people’s lives. Thanks to the unending “Breaking News” and Social Media we are very much aware of all the “bad” that is 2020. For this reason, I wanted to focus my 2020 Recap on some of the “GOOD” and a reminder of our time-tested core investing principles through lessons learned from 2020.



  • Strong stock market returns – March showed us the fastest bear market experienced in history when the S&P 500 dropped 34% from its all-time highs in 23 days. In the past this kind of decline took on an average of 11 months to occur. But the GOOD is it took just 4 months for the market to increase to new highs making it the fastest recovery on record from a bear market.  As of December 30, the S&P 500 was up 17.63% for the year.1
  • Largest rise in 3rd quarter GDP – The economic result of the reopening of the economy saw the largest growth in gross domestic production (GDP) for the 3rd quarter in 2020. This equated to 33% annualized. A reminder here is that the U.S. economy is driven by services and consumers.2
  • Federal Reserve immediate action – Lessons learned from the ‘08/’09 financial crisis led to the Federal Reserve’s (Fed) immediate action geared towards providing liquidity and funding to consumers and businesses alike. This was done by dropping “policy rates” and implementing its full range of tools. Per Chairman Powell, the Fed is “not even thinking about raising rates,” suggesting that rates will stay low for at least a couple years.3
  • Low-interest rate environment – Low-interest rates drive investors to the stock market looking for returns. Additionally, this environment dropped the average rate on the 30-year fixed mortgage below 3%, giving homeowners an opportunity to refinance as well as increasing the overall housing market.

Broad Range of Subjects:

  • COVID-19 Vaccines – In January, Chinese scientists shared the genetic code of this new unknown virus with the world and the race was on to develop a vaccine. What was developed was a totally new kind of vaccine using Messenger RNA (mRNA). The mRNA vaccines from Moderna and Pfizer were developed, trialed and approved in record time of less than 12 months and with an effective rate of over 94%.4
  • Creativity/Entrepreneurship – Given the required quarantine, many people and businesses took to new ways of communicating and conducting business. Zoom and FaceTime calls replaced the traditional Happy Hour/Sunday Brunch and even wedding ceremonies. Advances were made in telehealth, remote work and other virtual work gatherings that may continue even after the pandemic. In an effort to get out of the house, many of us took advantage of outdoor activities causing crowded hiking trails and bike sales through the roof.  Pop-up events empowered entrepreneurs. They provided us an inventive way to go to the movies and see local concerts creating a sense of community even in the big cities.
  • SpaceX – On May 30, 2020 SpaceX launched 2 United States astronauts to the International Space Station on a U.S.-made rocket for the first time in nearly a decade. This marked the potential of a more cost-efficient space travel program reducing/eliminating our dependence on Russian technology. 5
  • Carbon Emissions – As reported by CNBC, the quarantine caused a significant decrease in transportation activity directly impacting carbon dioxide emissions. The U.S. experienced the largest decline at 12%. Another factor is the decrease in cost of renewable energy sources which has declined quicker than expected. 6

Investing Lessons Learned

Even in a year like 2020, our investing principles held true when navigating the uncertainty experienced in the markets. At Maxima Wealth Management our investment approach is called Structured Asset Allocation. The principal theories of Structured Asset Allocation are not new. They are time-tested and supported by decades of empirical research. Below are five principles reinforced from what we experienced in 2020.

  • Long-term view – Your personal financial goals/objectives should determine your investment decisions for the long-haul, not the day-to-day headlines. Focusing on this helps keep you invested during times of uncertainty.
  • Disciplined approach – Sticking to your plan and honoring your personal risk tolerance and time horizon ensures a disciplined approach. Monitoring the structure of your portfolio and reallocating over the course of the year can help properly position portfolios.
  • Market volatility opportunities – History shows us that extreme volatility doesn’t last long and is followed by positive returns. This can provide long-term investment opportunities to buy quality companies at lower prices.
  • Diversification – Being properly diversified can stabilize a portfolio and this still holds true. Holdings in bonds/bond mutual funds provided a less volatile portfolio.
  • Leading indicator – Stock markets are forward looking and provide an indication of what is expected in the future economic environment. Keep in mind this could be a short-term look and one should take a long-term perspective aligned with your personal financial goals/objectives.

Maxima Wealth Management

A big welcome to our new clients. We are excited you joined our team and will continue striving to exceed your expectations as your trusted financial advisor. 

A sincere thank you for everyone’s continued partnership and confidence. Please know we are your financial advocate and will continue to work diligently to provide you with the highest quality of service and guidance. Maxima Wealth Management is invested and committed to you and your goals. May you be content, wealthy and wise in the year ahead. I wish you a successful and memorable 2021.


Michelle Lee Wagner

1 https://www.slickcharts.com/sp500/returns

2 https://www.cnbc.com/2020/12/22/us-gdp-q3-2020-final-reading.html

3 https://www.cnn.com/business/live-news/stock-market-news-061020/h_213d00641eab8aacc55ff33db99a1421#:~:text=We’re%20not%20thinking%20about,interest%20rate%20increase%20until%202022.

4 https://www.biospace.com/article/a-timeline-of-covid-19-vaccine-development/

5 https://www.bbc.com/news/science-environment-52855029

6 https://www.cnbc.com/2020/12/11/covid-record-drop-global-carbon-emissions-2020.html

The Tao of Wealth Management

I’m excited to share today’s article. It reflects an investment philosophy supported by historical asset class returns, but puts it in terms of basic understandable action. The article is written by Jim Parker, a Vice President of a subsidiary of Dimensional Fund Advisors.

The Tao of Wealth Management

We at Maxima Wealth Management employ Dimensional Fund Advisors’ investment philosophy. You can read more at https://maximawealth.com/financial-planning-services/investment-management/.

Given the possible complex issues that can arise when determining your investment plan and then sticking with it, it might be best for you to meet with a financial advisor. A financial advisor can assist you in establishing the best strategy for your situation.

If you need a financial advisor or know someone who would benefit from one, please send them my contact information along with this blog.