We just finished one of the most tumultuous years in modern history.
A global pandemic.
Widespread civil unrest tied to policing and racial justice.
A disputed presidential election marked by hyper-partisanship.
Despite these challenges, the year demonstrated resilience of people, institutions, and financial markets.
The 2020 global stock market with selected headlines*.
(Click the graph to enlarge)
Investors saw sharp swings in the stock market. The decline early in the year was sharp and swift.
But despite a sequence of epic events and continued concerns over the pandemic, global stock market returns in 2020 were above their historical norm.
What are some takeaways for investors from this most unusual year?
Make a long-term investing plan.
Stick to the plan.
Don’t try to time the market.
Don’t react to events.
Don’t mix your politics with your investment plan.
These bedrock principles, all keys to building long-term wealth, served the investor well in 2020.
Here’s to 2021.
*chart from Dimensional – a mutual fund company I use in my family’s and my clients’ investment portfolios. I receive no compensation from Dimensional.