So many people and our clients are happy to put 2020 behind them due to shutdowns, lack of social life, Covid, etc. and are looking forward to 2021 as a re-emergence to normalcy. I couldn’t agree more, but do need to point out from an investors point of view 2020 was actually pretty good. The markets had a strong rebound from the March lows and rewarded the high growth companies that were best suited to navigate a more isolated world1. As a Certified Financial Planner (CFP®), I also have to add that from a financial planning perspective 2020 gave us the continued reasons why we talk about emergency funds, living within your means, maintaining a budget, setting up multiple income streams, etc. While my own personal life was not as much fun as normal, from a career standpoint 2020 offered a lot of opportunity for us to help people navigate their financial world. I’m happy to say our clients did pretty well overall last year. 

I was at a small chamber meeting a couple of weeks ago and the question came up, what is your theme for the year? Or in a brief one word to small sentence, what word or phrase will help guide you for 2021? Sad to say I do this type of thing every year and I was one of the few that didn’t need to think long on it. Before I get into my 2021 phrase, let’s start with 2020.

My 2020 phrase to client’s, friends, family, and myself was “Build a Moat”. Maybe a little crude, but short for “getting your financial house in order” or “shore s*** up”, LOL. 

My phrase ended up being 100% right, but for 100% the wrong reason. My focus coming into 2020 for clients was to remind them to get those emergency funds in order and to pay down debt as we could be nearing the end of the bull market run which lasted over 10 years. I was still very bullish on the stock market, but a bit concerned for people who did not use the past 10 years to build a solid base or financial foundation. With a presidential election and somewhat lofty valuations I thought 2020 could be one of the last solid years before a timeout on the market and for the overall economy. Of course, I didn’t know Coronavirus was right around the corner. 

As the shutdowns came into play the basics of financial planning were so vital to buy time essentially for people to keep food on the table and for some a roof over their heads. As we begin to turn the corner into 2021 some may find themselves digging out of a hole a bit, and should use the 2020 theme to take care of some essentials in 2021. Very similar to the housing crisis back in 2008-09, too many people were not prepared with a financial base and their situation ended up worse because of it. 

Now to the plus side of things…2021 is here and I too am glad to see 2020 go. My phrase for this year is “Storming”. Maybe better explained as “Choosing to move forward with purpose” or “aggressively taking control against the noise”. Some of the 2021 theme includes the need to make sure your financial foundation is set, but also to take advantage of what could be another solid year in the market despite the noise out there. 2020 did bring a correction back in March and I like seeing that relatively close in the rear-view mirror. Part of me feels we got some of the negatives out of the way last year. I also feel strongly that there is a good amount of pent-up demand from consumers who are ready to get back to some sense of normalcy.  There’s a lot of excess savings sitting around due to lack of things to do and with Congress pumping money into the system. 

Another area I like to point out is our publicly traded companies overall showed some of the beauties of what Capitalism is last year. Far too often big business is described as greedy who only cares about profit. While that may be true, I feel like there’s an addition to that sentence that’s missing. There’s a constant need for companies to prove themselves, to remain flexible, and have the ability to pivot to stay alive. Coronavirus tested everyone and everything last year. Big or small, private or public, Corona tested companies more than any election or president ever will and largely our public companies came out on top. Capitalism won out last year and is a strong reminder that we need to personally have the ability to navigate whatever is thrown at us much like large corporations did during Covid. We may not individually have the deepest pockets, but we still have the ability to live within our means, pay ourselves first, maintain 3-6 months in reserve, etc. 

As we get into 2021, the theme is to be “storming”. Let’s continue to move forward with purpose. PMG Wealth Management is here to help you shore up those financial plans. And for the markets, I do believe 2021 will be solid as well against a backdrop of noise largely in the first half of the year. We could have a pullback for sure as we are still navigating Covid. As we get into summer, I think we’ll have a lot more clarity on the virus and the markets. 

Should you have any questions let us know. Thanks again for your continued trust and confidence. 


Market refers to S&P 500 index

1. S&P 500 is up 70% from the low of 3/23/2020. Growth ETF $VUG up 88% and value ETF $VTV up 56% since 03/23/2020. Source YCharts. Past performance is no guarantee of future results.  

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested in directly.