Welcome to 2021!
Although almost everyone is glad to say goodbye to 2020, if January 2021 is any indication, it looks as though the New Year may very will hold challenges of its own - politically, socially and economically.
In March of 2020, when the markets initially sold off as a result of the COVID-19 pandemic, we reminded our clients that, during volatile times, it's only natural to want to react to wild swings in the stock market. We asked that you please try to remember the importance of staying invested and having a plan.
Volatility in March meant a falling stock market, whereas recent volatility means a rising stock market. Either way, our message is the same: increased volatility is not a reason to make investment changes. Rather, now is a great time to make sure that your investment strategy is aligned with your specific financial goals, time horizon and risk tolerance.
The keys to financial success are having a plan, investing accordingly, and staying disciplined with regard to diversification and periodic rebalancing, regardless of what goes on with the market in the short term. We have embraced broad diversification in our portfolios and we have been actively rebalancing your accounts, including when the market declines, to help you maintain discipline and avoid taking on too much or too little risk.
As part of this rebalancing, we are taking a position in preferred stocks for some of you. As a rule, preferred stocks act more like bonds than stocks, and investors buy them for current income, rather than capital appreciation. We chose to invest in preferred stocks in order to increase income in the low interest rate environment we are experiencing now. Like common stock, preferred stock represents an equity stake in a company, but many of its features make it more like a bond.
Heading into 2021, we are looking more at Socially Responsible Investments (SRI) and Environmental, Social, and Corporate Governance (ESG) investing for our clients who are seeking opportunities to fully align their investments with their personal values. The use of Socially Responsible Investments (SRI) and Environmental, Social, Governance (ESG) funds provides an opportunity to put investment dollars behind important themes that can influence the future while making a profit.
If you have not had to opportunity to review your plan with your Advisor recently, what a great New Year’s resolution!
Thanks to our clients, ODCM had a very good 2020, and our team is doing well. Our resolution for 2021 is to grow thoughtfully, only taking on 20 or so new clients – good ones – like you, so that we can continue to provide the responsiveness and level of service you have come to expect.
Our plans for 2021 include relocating our Alexandria office to Ballston, Virginia, a vibrant urban community in Arlington. It will be located at the Ballston-MU station on the Orange Line and the Silver Line of the metro system. If you are in the neighborhood, please be sure to stop by, once it is safe to do so again.
As always, we value you, your thoughts and your input. Please do not hesitate to contact us with any questions, concerns or ideas.
Your ODCM Team