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January 1, 2021

Dear Client: Returns for the major stock indices for 2020 and the current bond and money market yields are as follows: Index         2020Dow Jones Industrial Average     9.72%S&P 500   18.40% Fixed Income Yields1 year5 year10 year30 yearMunicipals0.13%0.22%0.69%1.47%US Treasuries0.10%0.36%0.91%1.64% Fidelity Government Cash Reserves Money Market Fund0.01% Happy New Year!  Believe it or not, markets are back to all-time highs.  Despite all the problems of 2020, we have again weathered the storm as investors.  As we know too well, the panic from the virus created havoc for countless lives, businesses, and livelihoods.  We have all dealt with the effects of the virus within our own families; the stress and effects are real and challenging.  As for the markets in 2020, the fear and panic created one of the greatest market opportunities of all time.  The major market index (S&P 500) has rallied 70% since the March 23rd low.  During this recovery, the markets also gave us an 8% decline in June, an 11% decline in September, and a 9% decline before the election in October.  Through it all, long term investors again logged a positive year in the markets.  Once again, the day-to-day grind of market volatility, along with all the stresses related to the virus, made perseverance as difficult as ever. We believe the momentum in the current bull market has legs into 2021 for many reasons.  First and foremost, the virus is being conquered through vaccines.  We believe the rollout will transpire better than expected, and every American will have access to the vaccine in 2021.  The heroes in American private industry met the call, as drug companies like Moderna...

October 1, 2020

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...

July 1, 2020

Dear Client: Returns for the major stock indices for 2020, and the current bond and money market yields are as follows: Index2nd QuarterDow Jones Industrial Average  -9.55%S&P 500   -4.04% Fixed Income Yields1 year5 year10 year30 yearMunicipals       0.21%0.46%0.86%1.70%US Treasuries        0.15%0.29%0.66%1.41% Fidelity Government Cash Reserves Money Market Fund0.01% So far, 2020 has been quite a tumultuous year; and we are only halfway through!  As we all know too well, the decade-long bull market came to an abrupt halt in February as COVID-19 created a nearly unprecedented type of fear and great uncertainty.  In the fog of the times, traders panicked and pushed the markets down 33 percent from the all-time highs.  As we remember, there were no easy answers for investors.  In March, we wrote that everything we have ever understood about investing is not to panic, and not to overreact.  We know that trying to time the market is difficult, and just when the fear is at its highest, the markets can turn quickly without pause; and sure enough, March 23rd marked the beginning of the best 50-day rally in market history.  As the markets recorded their best quarter since 1998, the age-old contrarian axiom to “buy when no one wants them and sell when everyone wants them” again proved to ring true.  We have again been reminded that truly buying low is always difficult because the fear and uncertainty are at their highest and this time was no exception. Undoubtedly, we live in unusual times, and with investing it is no different.  These markets have many of the most respected voices on Wall Street voicing an array of differing...

April 1, 2020

Dear Client: Returns for the major stock indices for 2020, and the current bond and money market yields are as follows: Index1st QuarterDow Jones Industrial Average   -23.20%S&P 500   -20.00% Fixed Income Yields1 year5 year10 year30 yearMunicipals1.07%1.17%1.44%2.08%US Treasuries0.15%0.37%0.67%1.34% Fidelity Government Cash Reserves Money Market Fund0.15% We are all well aware of the latest market-moving news.  First, we hope this letter finds everyone healthy and safe.  We know it is an understatement to say that we are all impacted by the COVID-19 virus.  We are all confronted with similar challenges, primarily the question of what we should do to best protect ourselves and families from the threats of this virus.  These challenges range from healthcare concerns to employment and financial considerations and ultimately, how best to care for those we love.  The burdens are heavy, and the uncertainties can be overwhelming.  We know and empathize, as we feel it too.  As with all challenges in life, we have risks to measure, problems and opportunities to resolve and decisions to make. Fear, panic, and emotion; everything we have ever studied concerning making rational investment decisions has taught us to be mindful to not act on emotion.  We know that feelings and emotions are temporary, felt in real-time and spark internal responses associated with anxiety and fight-or-flight responses.  These feelings are real and they affect our behaviors, decisions and quality of life.  Though we are not medical experts and perhaps cannot well articulate the biological experience going on in times of stress, we can add some perspective on market history and reflect on how markets withstood other times of fear, panic and recovery....

January 1, 2020

Dear Client: Returns for the major stock indices for 2019, and the current bond and money market yields are as follows: IndexYear-End 2019Dow Jones Industrial Average    25.34%S&P 500    31.49% Fixed Income Yields1 year5 year10 year30 yearMunicipals1.06%1.14%1.48%2.15%US Treasuries1.57%1.69%1.92%2.39% Fidelity Government Cash Reserves Money Market Fund 1.32% Happy New Year!  As we begin the new decade, please again recognize how your commitment to long-term investment principles has rewarded you this year.  2019 was the best year to be an equity investor since 2013.  Not only was the year strong in market performance, there was minimal volatility as 10 of the 12 months posted positive results and each sector in the S&P 500 increased for the year.  We had three market declines over five percent but did not record a single decline of ten percent in any of the major market indexes.  Also, the decade ending in 2019 proved to be a rewarding one for investors, averaging an annualized 13% rate of return, though only the 4th best decade since 1930 trailing the 1950s, 1980s, and 1990s.   No matter how you slice it, this past year and decade again proved to be excellent periods for long-term investors. As we reflect on a great year and decade in the markets, we still remember the negative year in 2018 and the relatively quick 20% decline in the 4th quarter of 2018.  We wrote one year ago, at the low of the markets, how we remained optimistic for the year ahead.  Though we know short-term market calls are difficult, we know we have to continue to make risk decisions based on rational, thoughtful, and principled processes....