US stocks continued to move higher last week on the news of positive initial results from Pfizer regarding their COVID-19 vaccine.  The S&P 500 index traded up 2% for the week, pushing the year-to-date return to 13% and moving the index to near all-time highs.

The equity markets reached its low point earlier this year on March 23 after dropping more than 30%.  Since then, an incredible rally of 64% has taken place.  In other words, an investor who began the year with a hypothetical $100,000 in the S&P 500 would have been left with approximately $70,000 had they sold in the depths of the March decline.  Conversely, an investor who stuck with their initial investment would have approximately $113,000 today.

Markets are very difficult to predict in the short-term, but in the long run the path of equities has historically been higher.  The chart below highlights in red the largest decline of the S&P 500 index during each of the last 40 calendar years.  Despite average declines of nearly 14%, the index provided investors with a positive return in 30 of those years.  We encourage our clients to remain focused on their long-term goals and avoid drastic portfolio changes based on shorter-term news.

Key Economic Releases This Week

Asset Class Returns

Prices & Interest Rates

Source: Morningstar