Q4 2019 Returns By Asset Class

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 Q4 2019 for those of you that are interested.  Charts shown in the link below, now more readable with each on a separate page, legend at the bottom, zoom to your liking):

2019Q4 Asset Class Performance

A few call-outs from the data:

  • Q4 was a quarter of strong returns with all asset classes in the positive, despite continued predictions of impending economic doom.  The best performing asset class was Emerging Market Stocks (+11.8%), with US Large Caps (+9%), US Small Caps (+8.3%) and Foreign Developed Stocks (+8.3%) all not far behind.  Emerging Market Bonds (+5.2%) also did very well, as did Commodities (+4.8%), which have underperformed for over a decade.  Bond returns were more muted, but still positive, running more like the tortoise than the hare of equities.  High-yield was up 2.5%, with Short-Term Investment Grade up 1% and Aggregate US Bonds up a modest 0.2%.  REITs underperformed for most of the quarter, but eeked out a positive return of 0.6% with a great run in the closing days of Q4.
  • Long-term interest rates climbed a bit from their sharp decline in Q3, while short-term rates fell following the Federal Reserve’s 25 basis point rate cut in October.  This led to shorter-term bonds outperforming longer term bonds in the quarter.  The Fed has indicated that it plans to keep rates steady for the foreseeable future unless the economy tanks or inflation spikes.
  • The one-year charts show just how fantastic 2019 was for equity returns despite (or maybe because of) the extreme pessimism toward the economy in late 2018.  Q4 2018 was the worst quarter in a long time and scared a lot of people.  Those who stuck to their plan and continued to invest were well-rewarded in to 2019.
  • On the long-term chart, you can continue to see 1) the massive outperformance of US stocks and REITs since the financial crisis, with Q4 2018’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 ~30%+ from March 2009, despite fairing slightly better of late.

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