2020 in one chart

Oh, you didn’t realize a stock chart could display the emotions of an entire calendar year…?

2020 was a wild year to be alive. It was certainly a wild year to be an investor. I thought this chart showing TLT vs SPY pretty much summed up the year. TLT is an ETF that tracks the 20-year US Treasury note index. SPY is an ETF that tracks the S&P 500, arguably the most widely used proxy for “the stock market” these days. TLT appreciates when investors are seeking less risky assets. SPY generally appreciates in “risk-on” times, or when investors are willing to take on more risk for greater potential return in their portfolios. In the chart above SPY is orange. TLT is blue.

It’s fascinating to look at these lines diverge in late February, almost mirror one another throughout the year, and then watch SPY roar back to overtake TLT on an YTD return basis at the end of the year. Raise your hand if you saw that coming in mid March when SPY was down almost thirty percent YTD and TLT was up over twenty percent.

The chart reads like a thriller novel: Surprise. Fear. More fear. EVERYTHING-IS-ENDING FEAR. A little less fear. Optimism? Optimism. OPTIMISM! Take a breath. A “return to normalcy?”

And that’s where we leave it heading in to 2021. Maybe this year we can replace the question mark with a period on “return to normalcy.”