Protesters Wearing Masks

What a Difference a Year Can Make

June 1, 2020
Michelle HolmesBy Michelle Holmes
AVP - Investments

One year ago today, I walked down the aisle and married my best friend. Life-changing events like a marriage really help put things into perspective.  As I reflect on the last year, I can honestly say we would never have guessed how many life-changing events were in store during our first year of marriage.

Last summer was full of life’s normal ups and downs. We had lots of fun golfing and spending quality family time with our daughter before she headed off to her second year of college. However, we also lost a dear friend — the part of the vows “in times of sickness” came quicker than we thought, when I had my left hip replaced in October. The year ended with our daughter heading off to Singapore for her dream study abroad program at Singapore Management University.

Both the stock and bond market had great returns in 2019. The S&P 500 Index rose 31.5 percent and the Intermediate U.S. bond market rose 6.7 percent.

No one could have predicted what would happen in 2020.

As the New Year started, all seemed well and the future looked bright. We were getting ready to go see our daughter in Singapore when a virus started spreading through China. Lucky for us we were able to go on our trip since we were not flying through China and Singapore is an island more than 2,000 miles south of China. What we didn’t expect was to come home to a worldwide health pandemic. The virus was now spreading through other parts of the world.

The world as we know it changed very quickly. Cities, states and even countries across the world began shutting down in March. Much of the world’s economic activity came to an abrupt halt. Social distancing became the norm. Businesses shut down and laid off millions of people.

Chart: Jobless Claims

The stock market plummeted, losing almost 34 percent in a manner of weeks. A recession was now inevitable. The Federal Reserve quickly responding taking short-term rates to near zero and provided liquidity to keep the financial system working. The Government provided several rounds of fiscal stimulus to businesses and individuals to help during the shutdown.

My family was very fortunate during this time. We were able to continue to work. Our daughter returned home safely and finished her semester online like many other students across the world.

As the Month of May ended, all 50 states started loosening restrictions and allowing businesses to reopen. The stock market recouped a large portion of the downturn with the S&P 500 Index gaining over 36 percent from the low point in March. We are starting to see signs of life in some of the hardest hit areas of the economy. Data from restaurants, airlines, hotels etc. are bouncing back from their lows.

Chart: Consumer confidence

However, consumer confidence is only recently off its lows and well behind the recovery of the stock market. So with millions still out of work and consumer sentiment as low as it is today, it is not hard to imagine how one more shock could send the county past the tipping point. That is exactly where we are today.

The video of the death of George Floyd while in police custody sparked protests across the country. Some of the protests have turned into full-blown riots with protestors violently clashing with police.

The country may shift directions as a result of the protests and the pandemic, but eventually both will end. Normal life could look different than it did before. My hope is that we emerge from these trying times a more tolerant and a better-prepared country.

Reflecting on what we are grateful for is a good exercise to reduce stress and anxiety during challenging times. I've found that it's not really things that are important, but the people in my life that matter the most. I am thankful for the wonderful family, friends and colleagues that have blessed my life and made it better.

The future is still unknown, but I remind myself the future is always unknown — even during less volatile times. No matter what the future brings, I have my best friend at my side taking the journey with me. For that, I will always be grateful.

At Security National Bank, we are here by our clients’ sides, to help them plan for their future even during times of uncertainty. Contact us today if you have questions regarding your financial future.

About the Author

Michelle Holmes, CFA

Michelle Holmes is an Assistant Vice President in Investments with Security National Bank's Wealth Management Division. A Chartered Financial Analyst® charterholder, Michelle has two decades of investment experience. She graduated from Morningside College with a Bachelor of Science in accounting, business administration and economics.