2020 was an interesting year to say the least. It introduced a way of life that no one could have expected. While many Americans were worried for their health and livelihood, the Federal Reserve and Congress stepped up and provided a stimulus package. People making under $75,000 received up to $1,200 and for those that were unemployed the first four months of the pandemic they received an additional $600 per week on top of normal unemployment. This led to two-thirds of those unemployed making more on unemployment than they were making previously in their jobs.
For some Americans receiving additional compensation coupled with decreased spending due to the uncertain future economic and health environment has led to unique and unexpected consequences. For example, U.S. Credit card debt went down in 2020, the savings rate went up from 2019, and savings deposits are also much higher than 2019. You also have corporate America, cautiously waiting with exceptional levels of cash on their balance sheets. Unemployment levels are still above prepandemic levels and we hope that this will improve as the vaccine rollout continues.
While we do believe there may be some short term volatility, we are still overall optimistic about the stock market considering interest rates are low, we have an expected economic recovery around the corner and there is so much money still on the sidelines to be invested.