The Year in Review: An Update from John Ackerly

The Year in Review: An Update from John Ackerly

January 2021

Great news! 2020 is over and Davenport Asset Management has exciting plans for 2021! No doubt 2020 was a rough year and one that will be talked about for a long time. A co-worker summed up the year by saying if she had known 2020 would turn out the way it did she would have done a lot more on New Years Eve. Wouldn’t we all? But we made the best out of the situation. We cleaned and decluttered our houses, loaded up our trash cans, made friends at donation centers and watched enough Netflix to make a teenager proud.

Most families were forced to cancel trips and many are planning make up travel when the pandemic lifts. Travel in my family is not worthy of a magazine cover or an “Instasnap” or “Facialpage post” (or whatever they are called), but a John Prine concert was on the calendar. Sadly he died of Covid, but his quote, “If I can laugh when I should cry I am doing pretty well” is not a bad summary for making the best of 2020. We all found much needed humor in our long hair, office sweat pants and Zoom bloopers, and the markets fast recovery was a boost as well.

In many ways the S&P 500® Index’s gain of 18.4% for the year including a 65.2% increase from the bottom on March 23, was incredible considering a worldwide pandemic, a contested election, and civil unrest. Even beleaguered value stocks started to show signs of bouncing back in the fourth quarter. We expect that to continue given their attractive valuations and their position to benefit from a surge in pent up demand for travel & leisure and an economic recovery. We believe with better treatments, vaccines arriving and businesses learning to adapt and thrive the seeds are planted for a brighter future.

Preparing for the Future, Despite This Year’s Setbacks

At Davenport & Company our technology team had us up and running as if working from home was nothing new (our spouses and dogs may differ). We spent heavily not only on the picks and shovels of our business like laptops, dual monitors, and software, but we also upgraded our trading and performance systems. Our team is working hard on a major system update that will improve the online experience for clients, enhance reporting, and offer more investment choices which may include more alternative investments. We are busy at work planning for the future and look forward to sharing more details in coming months.

The 30 employees of Davenport Asset Management have rallied together to stay in touch with clients, make timely investment decisions, and provide access to our investment team and their strategy for managing through the market’s volatility. We are proud of our team and work hard to continue to improve our services.

Our Quest for Better Communication Spawned Our Virtual Investor Summit Series

While we were unable to host due diligence meetings and in person reviews, we worked hard to adapt and communicate our strategy through new channels. Some of us are now fluent in multiple Zoom languages (Zoom like Xerox is becoming the verb to describe video conference calls): Cisco Webex, Skype, Google Meet, and Facetime. We were pleased to roll out our Virtual Investor Summit Series to include the following events:

Davenport Asset Management Investment Strategy in a Pandemic – George Smith and Chris
2020 Election: Character vs. Economy – Phil Orlando from Federated Investment
Post-Election, What Lies Ahead? – Mike Beall, George Smith and Chris Pearson

We received some positive feedback and look forward to a full agenda in 2021 to include:

Virtual Investor Summit Series in 2021

January 21st Live Zoom Presentation: Thriving Nonprofit Boards with Katherine Whitney and David Charlton
Mid-February Podcast: Status of Charitable Donations Michelle McKinnon from McGuire Woods
Late February: Media Replay with Geoff Sulanke and Hartford Funds

The scientific nature of the ordinary man is to go out and do the best you can.
– John Prine

Some experts estimate that five years of technological advancement have occurred since Covid hit in February. Companies have adapted, innovated and realigned their business in ways not imaginable just a few years ago.

The technological revolution has pulled forward innovation at an impressive speed. Many work routines like business travel, in person meetings and conferences have been eliminated or more cost effective alternatives discovered. Many of these changes will make companies like ours stronger and better for years to come. However, with Covid cases increasing including a new fast spreading strain, the next couple of months are likely going to be tough and worsened by gray skies, cold weather and cabin fever. We don’t expect 2021 to be easy and without challenges, but we will remember the Navy Seal mantra: JUST DEAL WITH IT! To help you manage the remaining winter months, our team has the following suggestions:

Tips to Fight Quarantine Fever

Books: Beneath a Scarlett Sky, Cutting for Stone, A Higher Call, A Gentleman in Moscow

Binge Watch: Succession, The Undoing, The Good Place, The Great British Bake Off

Games: Cards Against Humanity, Jenga, Quiplash and Kahoot (both are good games pulling in folks from different locations)

As for your investments, rest assured that our investment team is working hard every day to make the best investment decisions we can. In tough markets like the Spring of 2020, we hope it is comforting that the profit sharing plan of our 400+ co-workers are also invested in the same strategies as many of our clients. I assure you our employee’s keep a very, very close eye on every investment decision we make.

Thank you for your continued trust and confidence and we welcome your comments, suggestions and questions.

Happy New Year!

Sincerely,

John P. Ackerly, IV, CFA,
Director of Asset Management

IMPORTANT DISCLOSURES
Past performance is not indicative of future results. Diversification and asset allocation does not ensure a profit or guarantee protection against a loss. There is no guarantee that a company will continue to pay dividends. The statements and opinions expressed in this article are those of Davenport Asset Management as of the date of the article, are subject to rapid change as economic and market conditions dictate, and do not necessarily represent the views of Davenport & Company LLC. This article does not constitute investment advice, is not predictive of future performance, and should not be construed as an offer to sell or a solicitation to buy any security or make an offer where otherwise unlawful. Investing in securities carries risk including the possible loss of principal. Individual circumstances vary.

Important Definitions:
The S&P 500 Index is comprised of 500 U.S. stocks and is an indicator of the performance of the overall U.S. stock market. Standard & Poor’s Financial Services LLC, a division of S&P Global, is the source and owner of the registered trademarks related to the S&P 500 Index.