Greetings from Tufton Capital, where the tinsel has been packed away, the winter weather has formally arrived, and your team of investment professionals has been busy closing the books on a year that will never be forgotten.

Let me first begin with what matters most – your family’s health. In these humbling and unprecedented times – times in which our children and grandchildren are learning “virtually” and food “take out” is the new norm – one cannot help but be reminded of life’s true priorities. As vaccines become increasingly available and a true “reopening” becomes more realistic, it is my sincere hope that this letter finds you and your loved ones in good stead.

Now, onto the market. Even with the stormy seas we faced in 2020, equities continued to sail higher and surmounted Wall Street’s “wall of worry” as investors focused on the brightening light at the end of the tunnel. For the year, the Dow Jones Industrial Average posted a solid 9.7% gain (total return). Not to be outdone, the S&P 500 shot up 18.4%, resulting in back-to-back years of double-digit returns for the index. But even as market participants rejoiced at these outstanding returns, anxious questions continued to rise to the fore. How long will the good times last? What “shape” will the recovery ultimately take?  And perhaps most vexingly, how can one account for the much-discussed disconnect between a shell-shocked economy and soaring stocks?

We think about these questions often and address them in the pages that follow with our firm’s outlook for both the economy and financial markets in our article starting on page 2 entitled “The Stock Market Has Gone Viral”. This quarter’s Tufton Viewpoint also includes an article discussing and analyzing one of our favorite stock ideas, Digital Realty Trust (DLR). This REIT (real estate investment trust) operates in the cloud computing space and should be a leader as the transition to cloud-based data centers continues to grow exponentially.

In prior musings in this space, I have candidly shared my discomfort with macroeconomic forecasting. But with the number of “shots in the arm” increasing and our economy gradually reopening, I hope you’ll forgive me for a note of optimism—if not for the market writ large, at least for your place in it. Take a peek inside this newsletter, and you’ll find the thinking of a driven, diverse and incredibly talented team of investment professionals. These are the people who have secured our clients’ trust and safeguarded their interests since day one at Tufton Capital. And they’re the ones working, right this very moment, to ensure that even as the economy changes seasons, your financial future remains sunny indeed. 

Chad Meyer, CFA

President