Print Post Approved PP 490986 / 00035

DIRECTORS : CHRIS BURRELL ROGER BURRELL ( Acting Chairman ) IAN DAVEY ROBERT CHAN ELAINE ANDERSON MARI ASHTED ALICIA KENDALL

ASSOCIATE DIRECTORS : LYNDA MYERS MICHAEL BURRELL

ASSOCIATES : JAMIE ELGAR CHRISTOPHER HAMPTON ERIC HARRISON DYLAN KATZER BRUCE McLEARY SHAUN MINAHAN

SENIOR INDEPENDENT DIRECTOR : GREG VICKERY AO email : clientcare @ burrell . com . au internet : www . burrell . com . au

The performance of equities markets in 2019 was one of the best for decades . 2020 was the year when records were broken :

�

�

�

New peaks were achieved early in the new year ;

the fastest bear market ( -20 %) in history in March ;

the fastest run to bull territory (+ 20 %) between April and May ; and

� the best November performances for many global markets .

It was a year of trials and tribulations , where patience was tested but those with a long-term investment horizon were ultimately relieved and rewarded . Late March provided some rare opportunities for those with cash .

In early 2020 , the first signs of a thaw emerged in the trade war between the US and China with the signing of the Phase One deal . Tariffs were rolled back , China promised to expand the purchase of US goods and agricultural produce and commitments on technology transfer , intellectual property and currency were partially addressed . The level of uncertainty subsided , and global financial markets surged as central banks ’ “ lower-for-longer ” interest rate policy combined with quantitative easing swelled the level of global liquidity .

2020 – A Year in Review

Global liquidity has reached historical levels as the quick succession of trade wars , slowing economic activity , pandemic and associated recession saw “ cut interest rates and throw money at it ” responses from central banks . Most of the liquidity created appears to have been misdirected . Global business investment disappointed , with risk assets the major beneficiary of central bank assistance , with some equity market bubbles appearing as too much money is chasing too few good assets .

The new year will start off an elevated point for market indices . US indices are currently at or near record levels , with expectations sky high as investors ignore any semblance of bad or disappointing news . Other global markets are also elevated , most within 10 % of their respective high-water marks and while momentum is still positive , the failure of economies to respond to the availability of a vaccine in a sustainable manner could quite easily trigger a correction . There has already been some suggestion around the possibility of a “ double dip ” recession in the US as the rate of new infections surges to new peaks with the onset of colder weather in the northern hemisphere .

In most markets , a fully-fledged recovery is already priced in . Central bank action is encouraging risk taking on a wide scale and equity investors are embracing “ there is no alternative ” ( TINA ) mantra while ignoring skinny low risk-adjusted returns .

Participant of ASX Group and NSX ABN 82 088 958 481 ASFL No 247431