The 10 Lessons LPL Research Learned in 2020

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2020 is finally over, and we have many lessons to share from that rough year. This week we discuss what we learned in 2020, the January 5 Georgia election runoffs, and what the big 2020 year-end rally could mean.

What’s in store for 2021?

2020 ended with a bang, as stocks had their best end-of-year rally ever and the S&P 500 Index was up nearly 15% for the final two months. The previous times when stocks ended a year this well we experienced gains the next year every single time—with stocks up in the double digits each time. Even January was higher every time. With an improving economy and continued stimulus, there are many reasons to think this bull market has lasting power.

We are watching Georgia

All eyes are on the two special run-off elections in Georgia this week that will help decide the final makeup of the US Senate. If the Democrats win both seats and the Senate splits 50-50 between the two parties, a tie would be decided by the Vice President—and thus control may be in the hands of the Democrats. This may upset markets some, but we still don’t expect any major tax hikes or increases in regulation with such a tight Senate.

What we learned in 2020

One of the big takeaways from 2020 has been that markets are forward-looking. They don’t care about our feelings and only look ahead. Also, records are made to be broken, returns don’t come in a straight line, stimulus matters, and modern medicine is a wonderful thing.

Tune in now

Listen to the entire podcast to get the LPL strategists’ views and insights on current market trends in the US and global economies. To listen to previous podcasts go to Market Signals podcast. You can subscribe to Market Signals on iTunes, Google Podcasts, or Spotify and find us on the LPL Research YouTube channel.

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IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. Investing involves risks including possible loss of principal. Any economic forecasts set forth in the podcast may not develop as predicted and are subject to change.

References to markets, asset classes, and sectors are generally regarding the corresponding market index. All indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and do not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services. LPL Financial doesn’t provide research on individual equities. All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

All index data is from FactSet.

All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.

This Research material was prepared by LPL Financial, LLC. 

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