In opposition to many odds, the stock market not solely survived a pandemic, however thrived in 2020, making it a tricky 12 months to navigate for traders. The S&P 500
closed out the 12 months with a 16% acquire, regardless of greater than 80 million COVID-19 infections by the tip of 2020 — that quantity is presently at 95 million — and 1.eight million lifeless from the illness — world deaths at the moment are over 2 million — and economies upended.
However a number of strategists and fund managers who MarketWatch spoke to or whose recommendation we flagged final 12 months through our Must Know column, made some spot-on calls. That was typically as a result of fruits of sticking to tried and true methods and beliefs, being attentive to historical past, and specializing in firms well-placed to trip out the COVID-19 pandemic and past. Calling a correction The 12 months 2020 was dominated by the stock market’s plunge right into a bear market, triggered by the COVID-19 pandemic, and its subsequent surge again to all-time highs. The large drop for stocks got here as COVID-19 went from spreading throughout China to Europe, and borders started to shut. Stocks began tumbling on Feb. 20, and the S&P 500 would lose practically 34% earlier than the correction was over. A prescient name got here on Feb. 24 from Chris Weston, head of analysis at Australian overseas exchange dealer Pepperstone, who had this warning for his purchasers: “If we see [S&P 500] price head through 3,200, then it will lead to even higher volatility and risk of a 10% drawdown. The bulls need to defend this level or it’s good night Vienna.” The S&P closed at 3,128.21 on Feb. 25 and spent the higher a part of the subsequent few weeks promoting off, bottoming on Mar. 23. Learn: 15 stock-market winners that index-fund traders missed out on in 2020 Weston wasn’t alone. On Feb. 6, Miller Tabak + Co.’s lead strategist Matt Maley spoke to MarketWatch a few 10% drop that he noticed coming, whereas Goldman Sachs’ chief world fairness strategist Peter Oppenheimer warned purchasers on Feb. 21 that “risks of a correction are high.” Even earlier warnings got here from Saxo Bank’s head of fairness technique Peter Garnry, who instructed MarketWatch on Jan. 21 that he was seeing a setup “eerily similar” to 1 that led to a selloff in January 2018, although he additionally appropriately predicted equities would march increased than that. And after flagging a possible rout to return for know-how stocks in late January, Tony Dwyer, a longtime bull and strategist at brokerage Canaccord Genuity, appropriately mentioned on Mar. 13 that the majority of the stock selloff had occurred, and a bounce was coming. The underside and charting it out Inspecting the previous proved helpful for followers of Michael Batnick, director of analysis at Ritholtz Wealth Administration. On Mar. 19, he laid out a number of examples of charts that confirmed how earlier corrections had ultimately ended, saying “it doesn’t matter when you buy, only that you buy.”
The day after the market bottomed, JonesTrading’s chief market strategist Michael O’Rourke warned purchasers that it was a “dangerous” time to be damaging on stocks or battle an accommodative Federal Reserve, whereas DoubleLine Chief Govt Jeffrey Gundlach appropriately assured his followers on Mar. 25 that loads of upside was forward. Yves Lamoureux, the president of macroeconomic analysis agency Lamoureux & Co. who nailed a panic occasion of 2018, instructed MarketWatch on Mar. 17 that the present selloff was about over, however that traders ought to brace for rolling bear markets into 2022. And there have been different forecasters who referred to as one of many final notable selloffs of 2020. Analysts at Longview Economics, a London-based analysis agency, warned that the rally from September lows was wanting “tired,” whereas Miller Tabak’s Maley predicted one other “downleg” from the September correction. Learn: Biden goals for finest stock-market rally in 92 years forward of inauguration Stock pickers It was a difficult and rewarding time to be a stock picker in 2020. In June, MarketWatch spoke to Mary Lisanti, president of Lisanti Capital Progress and supervisor of the Lisanti Small Cap Progress Fund
about neglected firms. Her 4 picks — Inphi
a maker of elements for semiconductors and optical platforms, pet meals maker Freshpet
cloud contact-center answer Five9
and shoe maker Crocs
— have gained 80% or extra in a 12 months. One other insightful summer time name got here from Gerald Sparrow, chief funding officer of the $31 million Sparrow Progress, a midcap development fund, who flagged Teladoc Well being
-owned messaging app Snapchat, and streaming system maker Roku
as stocks to personal. In a single 12 months, these stocks gained upward of 100%. And disruption was the theme behind 4 stocks flagged by Alex Ely, chief funding officer of U.S. development fairness at Macquarie Funding Administration to MarketWatch final summer time. Investing in his picks, mobile-payments supplier Sq.
software-as-a-service media shopping for platform Commerce Desk
outdoor-gear firm Yeti
and decking firm Trex
would have delivered good points between 80% and greater than 200% in a 12 months. Learn: Squeeze play? How the ‘most shorted’ stocks are crushing the market within the new 12 months And one final name comes from Capital Wealth’s market strategist Jeffrey Saut, who final summer time mentioned he was sticking to his perception of a secular bull market, a long-running pattern that may last as long as 25 years however is usually peppered by smaller bear markets. He predicted a brand new excessive for the S&P 500 by year-end. That occurred. MarketWatch will probably be checking in on 2020’s finest calls to see what strategists and cash managers are recommending for 2021.