We hope this beautiful fall in Upstate NY finds you healthy and safe. We have been so impressed with the resiliency and good nature of all of you as we are forced to alter our behavior to stay safe.
What a year it has been. You may recall that in the beginning of the year I was approaching 2020 with much trepidation. Little did I know! We have seen the entire market cycle of emotion in just a few months. On January 2, the S&P 500 started the year at 3,237. On March 23, the S&P 500 closed at 2,237 (-31% YTD). On October 16, the S&P 500 closed at 3,483 (+7.6% YTD). Raise your hand if you saw that coming? My hand is by my side. While everyone is pleased to see the strong recovery by the S&P 500, it doesn’t tell the complete story of the stock market.
Some very clear trends are continuing that started several years ago. First, growth stocks are crushing value stocks. Some big name growth stocks that everyone knows are Amazon, Netflix, Google, etc. Examples of big name value stocks that have gone nowhere are Exxon Mobil, Bank of America, General Electric, etc. The trend is clearly towards companies that embrace and advance technology. It began years ago, but was accelerated under Covid-19. Second, large cap stocks are dramatically outperforming small cap stocks. As we know, everything in the market is cyclical so at some point these trends are going to reverse themselves.
Now we find ourselves at the last stage of the year and approaching what might be the most nerve-racking for our country. We have had many conversations with clients over the last few months who are very concerned about their investments if one side gets control vs the other side. Let me be clear, the market can make money with a Republican President and the market can make money with Democratic President. To help prove the point, please see the chart below that I borrowed from an August article in Forbes. It shows stock market returns over the last 44 years and I think many of you will be surprised. Some presidents who have a bad reputation might be better than you think, others not nearly as good.
Please view the link below to read the whole article. There is a lot of background that I couldn’t fit in this newsletter and it is well worth the few minutes of your time.
Around the Office
Much has happened in Judy’s life since our last office update. Last spring she sold her house in Honeoye Falls and bought a plot of land near the Lehigh Valley Trail. She and Tim planned to design and build a new, smaller house, but Covid-19 interrupted. With record low interest rates and people all over the country remodeling, it is impossible to find a quality homebuilder. So, they wait. Don’t feel too sorry for them. Judy and Tim are now residing in their cottage on Honeoye Lake making improvements on it while they live there.
While Covid-19 has changed many people’s lives over the last few months, Kim has continued forward with her plan to help Miles be a national champion. True to form, Miles rocked it throughout the summer! Sadly, along the way, she lost past champ, Baxter. He had just reached the ripe age of 119, or 17 – depending on what scale you use. Anyone who knows Kim and her relationship with her dogs knows that no dog had a better owner than, Kim.
Melissa continues to live the quietest life I’ve ever seen a 20-something year old live. Like many people, she’s been working around her house and trying to maintain her fitness. I think it’s fair to say her dogs are getting pretty spoiled over the last few months.
As for the Silversteins, we got a lot of ‘quality time’ with each over the summer. Our older daughter, Gabrielle, was able to work her summer internship remotely. This meant she was able to perform her duties for a NYC marketing firm while working from her bedroom at home. Not as glamorous as she was expecting, but also not the apartment rental Mom and Dad were expecting. Our younger daughter, Shira, didn’t have a job when the clothing boutique she worked for closed so like many people she turned her passion into a business. She opened “Shira’s Bakery” and did a fine job of starting a business from scratch. I think it’s fair to say we enjoyed our time together, but the girls were clawing at the door to go back to school when August rolled around.
For the past several years, it has been our pleasure to hold an end of year party at different locations around Rochester. Unfortunately, we are not able to host the same party this year. We sincerely hope to bring the tradition back next year.
For the last six months we have used Microsoft Teams for our video meetings because the Compliance Department at FSC preferred its security features. Since the pandemic started, Zoom has improved its security and is now an approved application for video meetings. We are pleased to offer both as an option moving forward, but most people seem more used to Zoom, so that will be our default.
Let me reiterate, Judy and I very much appreciate everyone’s patience as we navigate through this difficult time. We are always here for you, so please do not hesitate to reach out if you have any questions.
All the best,
Michael, Judy and the FFP Team