From the Desk of Jack Kennedy III
2020: The Year of the Unprecedented
It’s with great excitement and relief that the book of two-thousand twenty-twenty is coming to a close. Appropriately, I’m choosing to title it “Unprecedented” and hope we’ll never have to open it again.
As we begin to turn the page, it’s truly remarkable to reflect on how we’ve endured 12 months of truly unprecedented times. Who would have thought how our world would change this past March.
Unprecedented State and Local Stay at Home Order (March): Businesses across the nation were ordered to close doors and we were instructed remain at home. Across the globe for the first time in history, bars and restaurants were closed for St. Patty's day.
Unprecedented Federal Reserve Action (March): The Fed began purchasing anything and everything in an attempt to stabilize the frozen credit markets, while bringing rates down to nearly zero percent.
Unprecedented Political Policy and Stimulus (March): Congress passes a 2.2 Trillion Dollar stimulus package known as the CARES Act, placing money in the pockets of Americans and business owners.
Unprecedented Medical Innovation (March/December): The first U.S. clinical trial began followed nine months later by the first vaccination on December 8th, 2020 to a 90-year old woman in the U.K.
Unprecedented Volatility: The year began with the Dow achieving record breaking highs in February, followed by record breaking declines in March and record breaking recovering and all-time highs in December.
Early in my career I learned that the art of managing emotions often supersedes the skills of managing money. While challenging at times, it is truly an honor and privilege to manage investor assets through troubling seas into the calm waters we see today. Over the past 25 years, the markets have taught me a valuable lesson.
It's not what you own, it’s what you avoid that matters most when investing.
Empowered by these words of wisdom, we have avoided sectors that historically get decimated in a recession; Airlines, Cruise Lines, Automotive, Entertainment, Media, Advertising, Movie Theaters, Restaurants, Shopping Malls and Retailers. These companies often become "zombie" companies hanging on the precipice of life and death. In the 2008/2009 recession, I completed a 100-year study that took two and a half years of my life. I learned the cyclical behavior of markets, sectors, consumers and policy-makers during economic downturns. The critical insights gained during this study led us to focus on two sectors – those that are immune to recessions and those that become beneficiaries of recession.
Just when I thought we had a firm understanding of patterns and behaviors, COVID-19 introduces itself. The word "unprecedented" became the cornerstone of conversation. Schools, universities, malls, stadiums, casinos, and public buildings were forced to close their doors to protect public health. As rapid as things were changing, consumer habits and behaviors remained the same. In every storm, one thing is certain; human beings will always empty out the grocery stores. Consumer staples experienced windfall profits as the pandemic created a world shortage of cleaning supplies and toiletries. Social distancing immediately inspired technological innovations, most notably around virtual collaboration and communication. Friends and families began communicating virtually sharing recipes, stories, photo's and memories. It was if Mother Nature slammed on the breaks and forced us to step out of our vehicles to take time and smell the roses. As we were forced into lock down, we dusted off the records, board games, CD's, bicycles or other forgotten pastimes. We were laser-focused on finding alternative ways to spend time with our loved ones and making them a larger part of our life, connecting with them in ways that we hadn’t considered pre-pandemic. I truly believe social distancing brought us all closer together, both emotionally and virtually.
My team and I are excited to close the book of 2020 and begin a new chapter as we usher in 2021. My only wish for 2021 is that we all look back and thank the world for making a collective sacrifice for the greater good of mankind. From the bottom of our hearts, thank you for allowing us to provide our services and the opportunity to be your partner.
Have a healthy and happy holiday season!
Jack W. Kennedy III CFP®, AAMS
President and CEO, Kennedy Investment Group
Branch Manager, RJFS
Any opinions are those of Jack W. Kennedy and not necessarily those of RJFS or Raymond James. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Past performance is not indicative of future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.