It goes without saying all of us at 1st & Main are as happy as you are that 2020 is behind us. As your investment advisory firm, we look forward to what lies ahead and are hopeful for a continued rise in economic activity. And while the U.S. and Europe are lagging, in large part due elevated levels of COVID-19, other developed and developing countries appear to be in the early stages of post-recession recovery.
Domestically many hurdles still lie ahead, particularly in the service sector which continues to struggle considering reopening challenges. Unemployment remains historically high and small businesses in particular face difficulties in obtaining hiring goals due to virus related restrictions. And while the goods economy and real estate have kept the domestic economy afloat, largely due to a lack of consumer spending on services and ongoing accommodative monetary policy, we must ask for how long and at what cost? It goes without saying the economy hinged on the ups and downs associated with the global pandemic over the course of Q4 and will continue to do so moving forward.
$3 trillion dollars of fiscal stimulus provided by the federal government earlier in the year and another $900 billion late in Q4 provided a much-needed backstop overall. Growing solvency concerns however remain at the state the local level.
Risk assets continued to rise providing hansom calendar year returns for investors. The technology sector again saw robust growth and provided positive earnings output and profitability over the course of Q4. The Tactical Allocation Portfolio (TAP), overweight technology since the initial risk-management event back in late-February and early-March, participated. We feel the current asset mix and diversification it provides is well positioned as we start the new year. There were certainly some under-performers, and a handful of trades hit their own unique circuit breakers and had to be sold to reduce risk. In the event underlying conditions begin to deteriorate those same under-performers are likely to provide much needed ballast to the overall portfolio. We remain hopeful the pandemic will subside, the economy will improve and equities will continue their march higher. Albeit remain confident in TAP and its ability to navigate whatever lies ahead.
The fixed-income sleeve moved back to intermediate term maturities early in Q4, an effort to reduce interest-rate risk, taking profit from higher-risk longer-term maturities held over the course of Q2 and Q3. Our balanced, moderate and conservative investors benefited in 2020 as well.
It goes without saying, as was the case for much of 2020, we do not feel the overall health of the economy supports asset prices at current levels but that is exactly why our confidence remains high. The model is nimble and was constructed to let prices run higher while always remaining conscious of underlying exposure. This approach will not waiver regardless of how markets behave moving forward.
All of us at 1st & Main wish you a Happy New Year and a safe and prosperous 2021. We look forward to providing ongoing independent financial services to you and your family now and in the future.
Fraser, Dudley, Alex, Josh, Christie & Melanie