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Annual Market Review: 2020

A recap of last year’s market with insights for what is on the horizon in 2021.

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Welcome to the 2020 Annual Market Review.

The year 2020 was a memorable one. It began with impeachment hearings of the president and ended with a contentious election and a new administration. In between, nearly every aspect of our lives was impacted by the COVID-19 pandemic. Face coverings and social distancing became buzz words and working and learning from home became the "new normal.”

Businesses were shut down, stay-at-home orders imposed, jobs were lost by the millions, industrial production and manufacturing came to a near standstill, and the economy decelerated by over 30%.

As with almost everything else in 2020, the pandemic impacted the stock market throughout the year. By the end of March, investor uncertainty and trepidation over the spread of COVID- 19 prompted a major market sell-off. However, fiscal stimulus measures in April, coupled with value buying, drove stocks to their best month since 1987.

Throughout the rest of the year, despite a resurgence in reported COVID-19 cases and deaths, an historic number of unemployment claims, delays in the long-awaited vaccine, and additional stimulus, the stock market continued to flourish.

December saw each of the benchmark indexes post notable gains, led by the Russell 2000, followed by the Nasdaq, the Global Dow, the S&P 500, and the Dow.

The fourth quarter was robust for stocks, with each of the major indexes posting double-digit gains, headed by the small caps of the Russell 2000, which surged to a gain of over 30%.

Despite the turmoil and early-year losses, all of the benchmark indexes listed here closed 2020 well ahead of their 2019 closing marks. The tech stocks of the Nasdaq, which gained more than 43.0%, led the way, followed by the Russell 2000, the S&P 500, the Dow, and the Global Dow.

You shouldn’t rely on this information as financial advice. Don’t hesitate to call your financial professional and get answers to questions about how market changes might affect your own portfolio.

The DJIA is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap

weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment. Chart reflects price change, not total return; because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

DATA SOURCES—Performance calculated based on data reported in WSJ Market Data Center. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities and should not be relied on as financial advice. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

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