The year 2020 will be remembered as a horrible year. The Coronavirus pandemic claimed over 1.8 million lives globally. The economy was hit hard causing an economic slump not seen since World War II. Financial markets experienced one of the most volatile periods ever, with a bear market at the beginning of the year followed by a strong recovery. The plans launched by various governments and central banks have been massive. Bailout packages, fiscal stimuli and expansive monetary policies managed to contain the March-April slump. To this must be added the rapid development of anti-coronavirus vaccines, which has strengthened investors’ propensity for stock market rises.

 

The month of December was still positive for the various global stock markets with the main indices performing positively. The European Euro Stoxx 50 index closed at +0.78% with the DAX +2.5% and the MIB +0.60%. The US indices did better, with the SP500 +2.56%, the Nasdaq +4.32% and the Asian indices Nikkei +2.45% and China +2.85%. Also at the Swiss level there was a positive evolution with the SMI index which marked a +2.43%.

 

Gold, after having reached the lows at the end of November, recorded a good recovery in December closing at USD 1’897 per ounce marking a +4.57%, closing a very good year with a performance at 31.12.20 of approx. 26%.

 

The lesson we can learn from this 2020 is that staying true to your investment strategy, a wide diversification (both in asset classes and sectors) and not panicking during periods of strong market fluctuations is fundamental to long-term investment success.

 

Expectations for 2021 remain positive, thanks to the approval of vaccines and the massive vaccination campaign the hope is that the situation can normalize during the 2nd half of the year. This, in addition to the various support programs in place throughout the world, should allow the economy to recover. A probable recovery in corporate profits should support equity markets, but caution should be exercised as the past year will continue to have a clear impact, especially on the activities and sectors most affected.