The Year that was - 2020, a look back
The year that was - 2020, a look back
It is New Year’s Day 2021, and one of the things that we have always done here at Boodle is to look back at the previous year before we focus on the upcoming year that is 2021. The purpose of this exercise is to put the year in context as it relates to the financial, economic, and human aspects of our shared experience and help us form a better understanding as we move into the new year.
2020 started with a trade war against China and ended with a vaccine for the coronavirus , a virus that so far has killed over 340,000 Americans. Our market outlook here at Boodle was neutral at the start of the year. We saw good gains for our members in 2019, and our company was well positioned to receive good exposure from a growing client base. But then in February, word was spreading that a virus was killing people in China and that this virus was spreading quickly across countries and continents.
By March, many businesses and most schools were being shut down. At Boodle, our accounts and our clients accounts started to lose money, and this hemorrhage would result in losses of 30 to 40% in some cases! After listening to various financial experts, and consulting with our financial tools, Boodle decided that the best course of action would be to add very little “new money” into our portfolios, and to ride the decline in the market, until a bottom was hit. We published a report on our views and had it in the hands of our clients within hours. One client who moved his life savings to the Boodle platform suffered a “paper loss” of $140,000.00 – this was serious.
Looking back now, and with the benefit of hindsight we can now see that our call about market conditions, and a possible recovery was 100% correct! The proof lies in a chart of the S&P 500, you can visually see the “V” shape recovery instead of the more serious L shape recovery.
And what happened to our client who lost $140,000 and was very unhappy? He not only made his $140,000 back, but he also gained a $65,000.00 profit, all by just following Boodle and its forecast!
So, the recovery started in March and would continue throughout the summer and it would form the backdrop to the 2020 Presidential race.
As a rule, Boodle tends to stay neutral on the occupant of the White House, but we will say that, with few exceptions, we make hardly any decisions based on which political party occupies the Oval Office.
So with that being said, lets take a look at the final numbers for the stock market in 2020. All 3 indices that we track here at Boodle closed out 2020 with records: The DOW gained 7.25% - The S&P 500 gained 16.26% and the NASDAQ advanced 43.64% for the year.
We also saw the addition of TESLA Motors to the S&P 500, and just to close out on a mind-blowing stat, TSLA gained an astounding 743.44% for 2020. In a few weeks we will share our views on what we might expect in 2021. Until then, thank you for following Boodle, we appreciate you.