Opportunity in a Downturn?

Updated: Jan 13

Second Quarter 2020

Investors who saw opportunity in the downturn of the first quarter of this year experienced historic gains in the second quarter. To take advantage of the volatility, we rebalanced many client portfolios by selling bond funds when the stock market went down and purchasing stock funds with the proceeds. As the stock market has increased, we rebalanced many client portfolios by selling stock funds and buying bond funds so that client accounts did not become overly aggressive.

Here are a few highlights from the Quarterly Market Review (click full report), a snapshot of the performance of the stock and bond markets last quarter:

Quarterly Market Summary

1. The US Stock Market Comes Roaring Back

Although 2020 has brought both some of the best and worst quarter performance, investors who stayed the course saw their best quarter earnings in the US Stock market in 2 decades (see page 3). The US Stock Market up 22.03% second quarter.

As you can see in this video, the performance of the stock market this year is a good reminder that long-term stock market performance can take a bumpy road.

2. Small Company Stocks Outperformed

Small Company Stocks outperformed Large Company Stocks both in the US and internationally (see pages 8-10).

Over the long-term, this is what we expect to have happen, which is why we recommend including an allocation to small company stocks in the equity portion of client portfolios.

3. Don’t Let a Recession Faze You

While we are still dealing with the fallout and recessionary consequences of the COVID-19 pandemic, the historical record following a recession is worth noting. The returns of the US stock market during the two years following 11 of the 15 recessions in the United States over the last century has delivered positive returns (see page 18).

In addition, the annualized stock market return in each of these two-year periods following a recession averaged 7.8%.

Working for You

While we still cannot predict how or when our current the Covid-19 crisis will end, nor the economic implications of our current events, we review your portfolios every month and rebalance them as needed.

If you have any questions regarding your portfolio design or risk tolerance, please don’t hesitate to contact us.

Q2 Market Review
Download PDF • 561KB

See full report of the Market Review for Q2 2020 or download here:



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