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October 1, 2020

by | Oct 1, 2020 | Quarterly Letters

Dear Client: Returns for the major stock indices for 2020, and the current bond and money market yields are as follows: Index3rd QuarterDow Jones Industrial Average   -2.65%S&P 500   4.09% Fixed Income Yields1 year5 year10 year30 yearMunicipals0.13%0.29%0.84%1.67%US Treasuries0.12%0.28%0.68%1.46% Fidelity Government Cash Reserves Money Market Fund0.01% For two weeks leading into September, the S&P 500 was again making new all-time highs; a truly remarkable climb (60%) from the March 22nd lows.  The month of August tallied a positive 7.19% return followed by a September decline of 4.32%.  Clearly, volatility is here again after a very strong and steady climb in 2019.  We all know the recent history by now: a once in a several generation pandemic and unprecedented government responses caused the markets to panic, and in just a matter of weeks dropped by 33%.  Undoubtedly the pandemic and ensuing reactions created an indelible impact on many businesses.  Through August, there have been 180 bankruptcies, each with liabilities of over $50 million.  In total, it is estimated nearly 100,000 businesses will never return.  There are many examples and statistics available to illustrate the economic destruction left in the wake.  Unfortunately, the damage is still being uncovered, and despite huge gains recently in growth and jobs, a full recovery is likely still years away. At LYNCH & Associates, we believe that despite the challenging year of 2020, the markets have held up reasonably well.  We are happy that nearly all of our clients participated in the recovery and did not partake in any significant market timing.  Certainly, each client is unique and has varying risk tolerances and goals, but the vast majority...