Asset Classes in 2020: A Lookback

LeoFinance
25 days ago
2 Min Read
469 Words

Lookback at the asset classes

This new year 2021, I am hoping I will be working from home majority of the time. When I do that, I tend to trade more. So, I am getting ready towards an year of active trading. This is something I do not do quite often. For example, for about 8 months of the year 2020, I barely put on any futures trades (which is what I mostly do), but I was quite active last 4 months of the year. Mostly because the last 4 months I was working from home (and also markets were quite volatile). So in order to plan for the coming activity I was looking into the conventional asset classes and how they performed the year 2020 as a whole. The following chart caught my eye:

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There is a lot of information on this plot. For most trader the overall return is often less important for an asset class. The return from the lows often matters more, which is also a measure of the volatility of the asset class. For example: The overall US stock market return is 15.5%. which is excellent in general, but the return from the Covid low of late March is 70%! This is phenomenal! Precious metals did excellent of course, especially Silver, considering THE year of UNCERTAINITY. I was really surprized to see crude oil with a big spike at the bottom. Then I realized, that crude oil futures did hit negative in March!! Phew! So that percentage bounce is basically meaningless from the low, but regardless, currently at $48, crude oil bounced a lot!.

Winners and Losers

There is always winners and losers during any market moves. It is very interesting to see that both vaccine producers, remote meeting makers, and Tesla did better than BTC!

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But hey, we know that crypto got a big year. We talk so much about it all the time, I decided to ignore it a bit for this article. As usual in cases of extreme volatility, rich gets richer..

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Yep, just take a look at Elon's net worth rise! Clearly we can see how the new money of Elon and Jeff is getting pulled further and further away from the old money like Buffet and Gates. Covid is not an issue for these people, and the American stock market. Unfortunately that is neither the society nor the Economy, no matter what others have told you.

Disclaimer: This is NOT professional advice, this is all just my own opinion and experience. I am NOT a Certified Financial Adviser. Consult professionals for any financial, accounting or legal related questions you have.

Charts are created in Tradingview.com, which is a free service.

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