“Growth itself contains the germ of happiness.” Pearl S. Buck
With another record year of growth in the financial markets, investors should be feeling more than just a germ of happiness. After falling more than 6% in May, stocks finished off the decade in high style. The DOW ended the year up 22.3%, the S&P 500 gained 28.9%, and the NASDAQ zoomed up 35.2%. The leading sectors for growth in 2019 included Technology +50%, Communications +33%, Financials +32%, Industrials +30% and Real Estate +28%.[1] Despite the trade wars and political mayhem in Washington, the economy did not live up to fears of a recession in 2019. The Federal Reserve Board had much to do with it. After raising rates four times in 2018, the Feds reversed course and lowered rates three times last year. Coupled with low unemployment and low CD and Treasury yields, investors piled more cash into equities for dividends and potential growth. Will this trend continue in 2020? Read on.
Let’s look back at a few other highlights of 2019. The Bill and Melinda Gates Foundation reported that health and education were improving everywhere in the world. More than $438B was given to charities in 2019. Alzheimer’s disease has early detection and science says a cure is around the corner. Success stories in tech were highlighted by apps to reduce pollution, speed up disaster relief response, care for animals, and advance emergency medicine. On the lighter side, the top 4 Instagram celebrities in 2019 were Cristiano Ronaldo, Ariana Grande, ‘The Rock’, and Selena Gomez.[2] Last night, the Golden Globes awarded Brad Pitt, Awkwafina, Joaquin Phoenix, Renee Zellweger, and the movie “1917” as the best in 2019.
Pacific Sun Financial achieved 21 out of our targeted goals last year. Heading the list were 99% client retention, upgrading technology, and 22% overall growth in assets. Some of our wonderful longtime clients passed away in 2019; our condolences and love go out to their families and friends. We miss you.
A new decade begins now. We are facing an economic global slowdown, battles in the Middle East, along with more violence and political upheaval at home. Although the markets will react, the long-term growth of our money depends primarily upon 3 things: interest rates, corporate earnings, and employment. With profitable companies, $1.3 Trillion in our nation’s money supply, 3% unemployment and very low interest rates…we are certainly starting this new decade in excellent financial health.
Wishing you a great year in 2020,
Mitch Fisher
[1] J.P. Morgan Asset Management 12-30-19
[2] Google 1-4-1