Q4 2020 Returns By Asset Class

This post contains the usual returns by asset class for this past quarter (by representative ETF), as well as year-to-date, 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’ll continue to post this quarterly for those of you that are interested. 

Q4 2020 (10/1/20 – 12/31/20)
Last 12 Month (1/1/20 – 12/31/20)
Last 5 Years (1/1/16 – 12/31/20)
Since ’09 Bottom (3/9/09 – 12/31/20)

A few notes:

  • While US Large Cap Stocks (S&P 500) had a fantastic quarter in Q4 (+12%), Foreign Stocks, both Developed and Emerging, actually outperformed (+16-17%), and US Small Cap Stocks completely dominated (+27%), finally playing a bit of catch up and topping their all-time high set back in 2018. All major asset classes were positive for the quarter. This was a quarter where many who try to market-time suggested caution was needed given a second wave of covid, a US election that could have dire consequences, gridlock and lack of stimulus from Congress, and a climax to BrExit. Trying to time the stock market and believing you’re smarter than all other investors, in aggregate, is a fool’s game. Q4 2020 is just another example.
  • Along those same lines, just look at 2020 performance as a whole. The worst pandemic in a century and stocks end the year strongly positive almost across the board (only REITs were negative as a major asset class).
  • On the 5-year chart, we can see that even commodities have now eked out positive returns, after being down almost 25% in March of this year due to covid. It’s been a rough decade for commodities, especially energy with supply glut after supply glut, followed by a pandemic-induced bout of demand destruction. Perhaps zero interest rates are starting a new uptrend here. There’s till a lot of oil and gas out there though, so it would be difficult for a rise in energy prices to not be met with more supply coming online fairly quickly.