As I look back on 2020, it was undoubtedly one of the most surprising, unpredictable, and volatile years we’ve faced in recent memory.
As a reminder, from Feb 19th, 2020, to March 23, 2020, the S&P 500 fell 31.93%
If you held a $5M S&P 500 ETF, that value went to $3,403,500 in the blink of an eye, a loss of $1,596,500. Not an easy thing to stomach.
Yet amidst the uncertainty, I’m proud of some key calls and advice that proved accurate during such a turbulent time. So, I’d like to take a moment to reflect on what we at Monument got right and how these lessons benefited our clients and could serve as guidance for anyone seeking solid wealth management advice in 2025 (or at any time for that matter).
1- Fear and Panic will Sink You: Stay Invested During Market Volatility
When the markets crashed early in 2020 due to the pandemic, fear and panic were everywhere.
But we urged clients to stay the course. In posts like “I Told You This Was Gonna Happen” and “How Not to Freak Out“, I emphasized the importance of maintaining a long-term perspective and resisting the urge to sell during periods of volatility.
As the markets rebounded sharply later in the year, those who followed this advice were rewarded. Staying invested during downturns is always easier said than done, but 2020 was a powerful reminder of why it’s so important.
2 – Don’t Try to “Time” the Market: Take a Long-Term Perspective
Throughout 2020, we consistently highlighted the dangers of market timing.
Posts like “It’s Not About Finding the Bottom” and “Here’s the Real Cost of Timing the Market” stressed that attempting to perfectly time entries and exits often results in missed opportunities. The rapid recovery in 2020 was proof of this principle.
Investors who were consumed with waiting for the “bottom” or who hesitated to reenter the market likely missed out on substantial gains. This experience only reinforced our belief that a disciplined, long-term approach is the key to financial success.
3 – Understand & Avoid Your Own Behavioral Traps
Investor psychology played a huge role in 2020. The emotional rollercoaster of the pandemic led many to make rash decisions. In “Why Current Sentiment Can Damage Your Plan” and “Traits of Short-Term Investors“, I warned against letting fear and market sentiment drive investment choices.
Those who avoided these behavioral traps and stuck to their plans were better positioned to benefit from the eventual recovery. Emotional investing remains one of the biggest challenges for most people, and 2020 was a textbook case of why it’s critical to stay disciplined.
4 – Cash is King: Economic Stimulus as a Market Driver
In the post “Hope From China, Truth About Stimulus, and Why Cash Is the Ultimate Hedge“, I discussed the role of economic stimulus in stabilizing the markets. As governments and central banks worldwide launched unprecedented fiscal and monetary interventions, it became clear how critical these measures were in fueling the market’s recovery. This insight proved invaluable for those trying to make sense of the rapid rebound amidst ongoing economic challenges.
5 – Be Prepared: Focus on Planning + Diversification
2020 also reinforced the importance of being prepared for uncertainty.
In “Preparing Your Investment Portfolio for the Presidential Election“, I emphasized the need for a well-thought-out plan and a diversified portfolio. I also emphasized that an economic expansion poised to last for several years was likely underway, positioning equities as a stronger asset class compared to stocks and bonds. Since that article was written, the S&P 500 is up 79.6% and the iShares Core US Aggregate Bond ETF (AGG) is down 17.23%.
This advice was particularly relevant as clients faced both the pandemic and the uncertainties surrounding the U.S. presidential election. Diversification and planning proved to be a strong foundation during a year when so much felt unpredictable.
6 -Recession and Bear Markets Are Not Always Linked
One of the more interesting insights from 2020 was that bear markets don’t always lead to prolonged recessions.
In “Bear Markets Don’t Always Mean a Recession“, I explained why market declines don’t necessarily signal extended economic downturns.
This insight was validated as the economy rebounded much faster than many expected, despite the severity of the market crash earlier in the year.
Why This Still Matters in 2025
Fast forward to 2025, and while the details have changed, all the principles remain the same.
The best strategy is still this: stay calm during volatility, focus on the long term, avoid emotional decision-making, forecast cash needs, and be prepared for uncertainty. Your gut is not a good barometer.
Here’s how I know…
Since the market low on March 23, 2020, the S&P 500 has returned 191%. Now compare that to the point I made above in #5 stating the S&P 500 was up 79.6% from Oct 6th, 2020. If you were “waiting for the market to recover” or “waiting for things to settle down”, you missed the spread between a 191% return and a 79.6% return.
Read that again because it should be a no-nonsense reminder that trying to time the market is a losing game.
Investors who panicked and sold in 2020 missed one of the greatest rebounds in market history, the S&P 500 is up 195% from that March 23, 2020 low. So again, have a proper cash management plan where you pull cash from portfolios when markets are up, not down, and avoid making reactionary moves based on short-term fear.
The same lessons that worked in 2020 are just as relevant today—and they’ll still hold true for the next decade. In fact, I think for my next blog I’ll revisit the 2022 blogs and write a similar set of reflections.
Keep looking forward.
