I think many would agree that we are glad to see 2020 finished. It was quite the year but overall we are very happy with how things ended up in our client’s portfolios. We continue to see high quality investments with strong balance sheets recover their value. The vast majority of our holdings maintained their dividends and we even saw several dividend increases in 2020.
We start 2021 off with several market impacting events. We will see the Georgia Senate runoff elections today which will decide which party will ultimately control the US Senate. It is a close race with projections leaning slightly Democrat. The market had originally liked the idea of a split Government with Biden Presidency but a Republican Senate. We are now seeing volatility as the market considers the potential for a completely Democratic US Government. If we see a Blue Wave, we believe we will see short term volatility. We also continue to see challenges and comments from the current administration that complicate the transition to the Biden Administration. We should see all these short term catalysts fade from the headlines by the inauguration date of January 20th.
Any market weakness caused by these events would be a buying opportunity in our view. There are many positives in the economy that should play out as 2021 progresses. The market will be fueled by the continued stimulus in the economy, low for long interest rates, and continued forward progress with vaccinations and treatments. These factors should overrule any short term election weakness and provide the conditions necessary for positive market performance in the coming year.
As always don’t hesitate to reach out to us if you have any questions about your individual portfolio.
Best wishes for 2021.
This communication has been prepared by Alan Tchabushnig and expresses the opinions of the authors and not necessarily those of Raymond James Ltd. (RJL). Statistics, factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. It is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a member - Canadian Investor Protection Fund.