Lessons Learned

Our lessons learned in 2020 would take up volumes, but there is an axiom that was strongly confirmed: The stock market is not the economy.

• Because the market is a discounting mechanism, there is often a disconnect between the performance of stocks and the current economic environment. In 2020, that disconnect became a gaping chasm with the market reaching several new highs despite GDP and employment figures that rivaled the Great Depression.

Our Outlook

• Though the initial rollout of the approved vaccines is moving slower than expected, increased immunization and a second stimulus package should support, if not accelerate, a return to more normal economic activity.
• Even more, some industries may experience catch-up demand that could lead to periods of over earning that would be dangerous to extrapolate.