In Israel, we feel the mix of fear of growing virus numbers as well as the optimism from the roll out of the vaccine. We hope the vaccine will reach each of you as soon as possible and hope that in time those skeptical towards the side effects will be proved wrong. It's seems that most of our webinar attendees believe COVID will still be with us in 2021 and that most of them will get vaccinated. Let's get Corona behind us!

Throughout Corona period, we have hosted numerous webinars via Zoom and have found this to be a major positive consequence of the virus. We recently held a webinar focused on 2021 key investment themes and you may follow the link to view it. For those who prefer to read, we will summarize the main points of that webinar here for you. During our webinar we asked the attendees to predict what will happen in the main issues discussed. Below you will find some more of the results.

2019 was a vindication year for the traditional asset management industry and asset allocators like us. Many skeptics sat on the sidelines in cash and missed the best year for returns we have had in a very long time. Our clients enjoyed excellent returns in both absolute and relative basis.

While 2017 was low positive and 2018 was negative, 2019 was very positive and brought the three-year returns comfortably into the annual targeted return range. This is the nature of the beast - market returns simply do not go in straight lines.

Our eyes now turn to 2020. As always, the crystal ball has its limitations and across our team we have slightly differing views for 2020. However, the consensus view is to remain faithful to our asset allocation principles.

I have just returned from spending two days with Pimco in London at their annual conference for investors. Pimco is one of the largest bond specialist firms in the world with an incredible depth of resources. The audience consisted of investment professionals from Europe, and it was apparent that everyone had come to hear not only Pimco’s macro-economic view, but also to clarify just how concerned we, as investors,  should be and what changes we should be making, if any, in the current circumstances.

It was an exceptionally high-level discussion and I will try to share some of the messages with you below. An interesting aspect of the investment world is how different personalities gravitate towards different asset classes. Optimists gravitate towards equities, pessimists to bonds and those with perhaps a tad too much hubris towards hedge funds. Pimco is a firm specializing in bonds. They ooze caution through the air vents. So whilst they were professionally non-committal about whether we are heading towards a cyclical change and/or recession, or not, they did an excellent job trying to identify whether there are any relevant signals now. The bottom line is no panic signals but elevated levels of caution looking into 2020.

When markets are going up strongly as they did in Q1 2019, no one asks tough questions and most investors focus on other aspects of their lives. Strong markets make our jobs as wealth managers easier. The main question being posed on a daily basis is should we sell down and take profits or remain loyal to our long-term plans and beliefs. This is a valid and serious question, which is worth the debate. Last year, January 2018 was a strong month and the rest of the year was negative, particularly February and the 4^th quarter. One has to ask the question if the gains from Q1 2019 are likely to be given up later in the year or not.

I am writing to you during our office move. Workers are all around busy packing and unpacking boxes. We have been in our old building for 10 years. At the time we moved in there, the S&P was about 880 points and the Dow Jones was about 8300 points. Since then they have gone up by 242% and 244% respectively. Even after a tough year and pretty awful 4^th quarter, the long-term gains are impressive. It may appear as though it was easy to make money however; there were plenty of reasons to be concerned along the way. When we said to clients over the years "focus on the long term", so far, we have been right.

As I tidied my office for the move I found a collection of year-end predictions for years gone by written by some of the highest paid experts in the world. Some were right some of the time; many were wrong most of the time… Some were right in the longer term and very wrong in the short term. It seems no one has the perfect crystal ball. 2018 rollercoaster has been no different but more on that below.

We look forward to hosting you in our new offices at the Amzur building.