McCollum Group Insights

[Pages:1]Winter 2020

McCollum Group Insights

"Our motive is simple; we care about people, their families

and their future."

W. Travis McCollum, CFP? Director

M. William McCollum, Jr. Consultant

David W. D'Alessandro, CFP? Financial Advisor Jamie M. Halbig

Senior Client Specialist

Fast Facts

1) At the end of 2019, the S&P 500 Index was up +31.5% for the year, which was its best return since 2013, while the Dow Jones Industrial Average was up +25.3%.

2) Baird's Market Strategist, Michael Antonelli, wrote in a recent blog:

"Ben Carlson wrote about this very thing right here: `Since 1926, U.S. stocks have been up double-digits 54 times (not including 2019). The average return in the year following a double-digit gain was 11.5%. The year following those doubledigit gains saw positive returns 39 times (72% of the time) and negative returns 15 times (28% of the time)'... If you took any given year in the history of the stock market it has been positive 73% of the time and negative 27% of the time (past performance is no guarantee of future results). What you'll see from Ben's stats is the exact same number so just because we were up big in 2019 doesn't mean 2020 has to be down."

3) As we look towards the new year, Baird's Chief Investment Strategist, Bruce Bittles, published his 2020 Economic & Stock Market Outlook. He states that his base case scenario is:

"Volatility remains elevated but the S&P 500 finishes the year with gains in the midsingle-digits. Stock market leadership moves

away from the S&P 500, with better opportunities being found overseas and in the mid-cap and small-cap spaces."

4) The best performing S&P 500 sectors in 2019 were #1 Information Technology (+50.3%), #2 Communication Services (+32.7%), and #3 Consumer Discretionary (+32.1%). The worst performing sectors were #9 Materials (+24.6%), #10 Health Care (+20.8%), and #11 Energy ( +11.8%).

5) The best performing stock in the Dow Jones in 2019 was Apple Inc. The stock rose +88.1%. The worst performing 2019 stock in the Dow Jones was Walgreens Boots Alliance Inc. which declined -11.1%.

6) The Federal Reserve raised interest rates 4 times in 2018, then proceeded to cut rates 3 times in 2019. Bruce Bittles notes that "Data from CME shows an expectation for at least one (and possibly more) rate cuts in 2020... A better outcome from our perspective would be a Fed that stays on the sidelines in 2020 even as growth and inflation pick up." It is an election year after all!

7) At the end of 2019, the 10-year Treasury yield is trading at 1.92%.

8) Don't forget to keep an eye out for your 1099 tax forms that will be distributed in the coming months! Tax Day is April 15, 2020.

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2019 Chart of the S&P 500

Robert W. Baird & Co. | 4350 Congress Street, Suite 400 | Charlotte, NC 28209 | (704) 571-7375

Certified Financial Planner Board of Standards Inc. owns the certification marks CFP?, CERTIFIED FINANCIAL PLANNERTM and CFP? in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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