For the last several quarters, I’ve posted returns by asset class (by representative ETF), as well as last twelve months, last five years, and since the financial crisis lows of 3/9/2009. While there is still no predictive power in this data, I updated those charts as of the end of Q1 2019 for those of you that are interested. Charts shown in the link below, now more readable with each a separate page, legend at the bottom, zoom to your liking):
A few call-outs from the data:
- Q1 2019 was almost as good as Q4 2018 was bad. For Large Cap US (+16%), Small Cap US (+13.5%), and Emerging Market Equities (+12%), returns were almost the mirror image of the previous quarter. All asset classes posted positive returns, led by Real Estate Investment Trusts (REITs) (+17.5%), which have a strongly negative correlation to interest rates and did very well as rates fell along with expectations for further Fed rate hikes. Foreign Developed stocks were up 10.5% despite economic slowdown fears. High-Yield (“junk”) bonds were up 7.5%. Short-Term Corporate Bonds, Aggregate US Bonds, and Emerging Market Local Currency Bonds all held their own, up 2-3% for the quarter.
- On the chart that shows the last 12 months, the ongoing divergence of US and non-US markets is evident. This is explained by the relative strength of the US economy and the US Dollar vs. the rest of the global economy and other currencies. This is even clearer on the 5-year and “since the bottom” charts. Of course US equity valuations are much higher than the rest of the globe (i.e. the US stock market is relatively more expensive given the stronger economic outlook).
- In the long-term chart, you can continue to see 1) the massive outperformance of US stocks since the financial crisis, with Q4’s meldown as just a blip on the radar 2) the slow and steady stable grown of bonds, and 3) the utter devastation in commodities, still down almost 30% from March 2009.