Good riddance, 2020.

You started out by scorching koala bear habitats in Australia. As you neared Thanksgiving, you not only took away beloved game show host Alex Trebek but also raised the coronavirus death toll in the U.S. to nearly 240,000. In between, Kobe Bryant and eight others died in a plane crash, murder hornets arrived, Colorado experienced its largest wildfire on record, the deaths of Breonna Taylor and George Floyd—among others—were followed by large protests, a derecho swept across the Midwest, five named storms made landfall in Louisiana as of the end of October and political divisiveness has so far hampered what should be a smooth transition from one president to another.

In the midst of all this, investors endured a short but painful bear market. Interest rates fell to new record lows. Gross domestic product (GDP) plunged at a 31.4% annual rate in the second quarter, as mandatory shutdowns disrupted many businesses. The number of people claiming unemployment benefits was at 20.3 million as of October 31, versus 1.5 million a year ago. The economic recovery is K-shaped, with some staying employed while others are continuing to struggle financially.

Sadly, I could go on. Suffice it to say that if Billy Joel wanted to rewrite “We Didn’t Start the Fire” or if R.E.M. regrouped and recorded an updated version of “It’s the End of the World As We Know It (And I Feel Fine),” there would certainly be more than enough material from this year’s headlines to pull from.

Speaking personally, my wife and I have been fortunate not to lose anyone close to us this year, though we know people who have. Our spending patterns have been a microcosm of broader trends: Less spending at restaurants, no movie tickets, suspended gym memberships and postponed travel. In their place, we now have a collection of face masks, bought additional workout gear, replaced some furniture, stocked up on toilet paper and increased how much we save.

Hopefully, 2021 will be the start of a return to normalcy. The initial data from Pfizer’s and Moderna’s late-stage trials suggest that their vaccines have the potential to protect people from the coronavirus. In the meantime, I plan to continue wearing face masks regularly. I encourage you to do the same.

President-elect Joe Biden’s administration will bring changes. A stricter regulatory touch and a renewed focus on climate change seem probable. Raising taxes on high earners and businesses will be much tougher. The Tax Cuts and Jobs Act (TCJA) was passed with just 51 votes; the Democrats’ caucus, at most, will have 50 senators.

The clock is ticking for getting new tax legislation passed. The tax breaks for individuals expire at the end of 2025. Maybe we’ll get some compromise between Democrats and Republicans. Then again, politicians seem more focused on appealing to their bases than finding solutions.

What I can tell you is that there have only been four calendar years with a Democrat in the White House and a split Congress since 1944. Average returns for the S&P 500 index, according to Sam Stovall of CFRA Research, have been 13.6% during those years. (Keep the small sample size in mind.) When a Democrat has been president and the party has controlled both houses of Congress, the S&P 500 averaged a gain of 9.8% (based on 22 years) versus an 8.8% gain for all years (1945 through October 2020).

December brings our annual tax guide. In it, you will find the changes affecting most taxpayers made this year and late last year. We’ve also updated our tax forecasting worksheet to include the above-the-line deduction for charitable donations and the economic recovery rebate. Because the rebate is based on 2020 adjusted gross income, some of you may be eligible to get more stimulus. If your rebate check was too large, you won’t have to pay any of it back.

You will also find a list of year-end financial moves. For space reasons, we condensed the list in the print version. More information about each suggestion can be found at AAII.com. While you are on AAII.com, check out all of the enhancements we’ve made this year. They are among 2020’s bright spots.

On behalf of everyone at AAII, have a happy and safe holiday season.

Wishing you prosperity and good health,