This Too Did Pass

Happy New Year,

In our email in March of 2020, when the markets had dropped 34%, we looked back 100 years at the S&P 500 during the 4 previous global pandemics. We found that it averaged double-digit positive returns during those pandemic years. This past year was no different, with the S&P 500 returning 16.26%.

The main alternatives to our strategy, Target Date Funds and Managed Asset Accounts, diversify across stocks, bonds and cash in an effort to protect investors during downturns. These strategies in 2020 still led to drop-offs that were too significant given their slow recovery and low returns. The securely allocated Fidelity Target Date Fund 2005 dropped 12% in March and returned for the year 9.66%. Fidelity Target Date Fund 2040 dropped 31% in March and returned for the year 18.16%. Our strategy held to its 36-year pattern of dropping less than the market and recovering faster, leading to a gain in 2020 of 31.46%, outperforming the average of the Nasdaq, Dow Jones and S&P by 9.08%.

B.S.F.S. Advisors does not know what 2021 will bring, but we invest confidently knowing that our mutual funds have a 36-year track record of success with average returns over 14% with only 5 down years.

Sincerely,
Samuel Schaeffer