It’s finally over: 2020 is in the history books. For equity investors, it has been an incredible year, with the Dow Jones Industrial Average (DJINDICES: ^ DJI) and S&P 500 (SNPINDEX: ^ GSPC) closing at all-time highs. the Nasdaq composite (NASDAQINDEX: ^ IXIC) fell just short of his own record, but capped his best year in more than a decade. Here’s a look at the last day of trading in 2020:
Investors have had a full range of experiences in just 12 months, ranging from euphoria to hopelessness to euphoria and more. Here is a list of the ways the stock market was truly amazing.
1. Strong returns
After performing extremely well throughout the 2010s, many entered 2020 believing the market was long behind. He certainly had one – but by the end of the year the returns were reminiscent of the height of the bull market. The Dow’s gain of around 8% was modest, but increases of 17% for the S&P 500 and 44% for the Nasdaq were sensational.
2. Huge swings
If you fell asleep on January 1 and woke up on New Years Eve, you might have thought the year was just another solid winner. But along the way, investors suffered the fastest bear market ever. The Dow Jones started the year at 28,538, but fell more than 10,000 points to its low before recovering all that and adding another 2,000 points to boot. Likewise, the S&P traded between 2,192 and 3,756, and the Nasdaq nearly doubled from its low of 6,631 in March.
3. A great year for mega-cap stocks
It’s not every day that you get massive growth from the biggest companies in the market, but that’s what 2020 has brought. You’re here made headlines for its 750% gain for the year, but it was just one of four members of the S&P 500 with a market cap of $ 100 billion or more that doubled in 2020. NVIDIA, PayPal funds, and Advanced micro-systems weighed with gains of about 100% to 125%.
Plus, even the biggest names in the market have generally done well. Apple climbed more than 80%, while Amazon saw a 78% gain. Netflix climbed more than 60% over the year.
4. Great disparities between market sectors
2020 was a winning year overall, but many industries missed the rally completely. Out of 11 stock market sectors recognized by S&P, four suffered a sharp decline in 2020.
Energy has been the obvious loser, with crude prices plummeting following massive disruptions in demand resulting from closures triggered by a pandemic. The finance, real estate and utilities sectors were also affected. Lower interest rates caused problems for bank stocks and other financial institutions, while restrictions on travel and movement put pressure on real estate markets, even as low rates eased the ‘obtaining financing. Among utilities, unusual conditions made good safe-haven stocks less secure, and even attractive dividends were not enough to grab investor attention.
5. Another great year for bonds
For years, many have justified the gains of the stock market by pointing to alternatives. Yet even though bond interest rates have reached unprecedented levels, total bond market returns have been strong.
Across the bond market, a popular exchange-traded fund spanning the gamut of treasury, corporate and other types of debt rose 5% for the year. Another bond ETF that focuses on long-term Treasuries enjoyed a gain of over 15%. Once again, however, the dangers of bond funds, with rates as low as they are, remain significant – especially since there are only much lower rates from here on out.
With 2020 in the record books, it’s everyone’s guess what 2021 will bring. We hope that investors can continue to find ways to make money, regardless of the difficult market conditions in the year to come.