Bob’s Journal for 12/24

This 2020 Holiday Season Will Be Different But Not the Worst

This 2020 holiday season will be different for Elaine and me, as I’m sure it will be for you.

While we have been healthy, our traditions have been shattered. We will have a small Christmas dinner with another couple in the neighborhood who we know follow safety protocols.

The community events that have been part of the season in the past, and some new ones we were looking forward to, were canceled. Yet, I can’t join those who say 2020 is the worst year ever or even the worst in our lifetimes.

People have lost loved ones, jobs and businesses during the pandemic. But the financial crisis that hit bottom in 2008 seemed to inflict more widespread pain.

I also think back to some years in the 1970s that included strife over Vietnam, high inflation, high unemployment, Watergate and other unpleasantness.

Of course, looking back further into history, there were the two world wars, the Civil War, the depression and more.

While 2020 hasn’t been a favorite year, a longer-term perspective tells me it won’t be remembered as the worst ever. More importantly, there were some good developments to note and reasons for optimism.

In March, Congress acted with dispatch and wide consensus to enact the strongest stimulus program in the world. That kept the economic effects of the pandemic from being far worse. It showed this dysfunctional institution can get something done when it has to do it.

The stock market continued to reach new highs, and toward the end of the year, the record-setting performance broadened to include more stocks.

The crisis also showed that a lot can be accomplished when innovation, creativity and ingenuity are unleashed. In March, the experts said at best it would take 18 months to develop an effective vaccine and longer to have it widely administered. We also were told that a good vaccine would be about 50% effective.

But the government provided coordination and incentives through Operation Warp Speed, and the private sector focused on the effort. We already have two vaccines with more than 90% effectiveness approved and more are on the way.

Perhaps more importantly, the techniques used to develop the vaccines soon can be applied to other health problems and perhaps spur a new generation of medical innovation.

Though they haven’t received the attention they should have, there were other important innovations during the year that we’ll benefit from in the future.

Of course, people learned to work and communicate remotely and made other changes. Companies retrofitted workplaces and much more to keep the economy functioning as much as possible.

The speed with which people adapted is impressive. A number of trends that were in place before the pandemic were accelerated.

It wasn’t the year we expected or wished for, and there still will be some negative fallout from the pandemic. For example, what does the future hold for office buildings and shopping centers?

There always are reasons to be pessimistic, and the pessimists seem to dominate a lot of market and economic commentary. Yet, overall, I think the events of 2020 give those of us who survived the pandemic a lot of reasons to be optimistic about the future.

Since the week’s news and market activities are shortened by the Christmas holiday this week, I’ll dispense with my usual economic and market discussions. Instead, my wife Elaine and I thank you for being part of our Retirement Watch family and wish each of you and your families the best in this season and in the new year.