Market Data Bank
S&P 500 SURGES SHARPLY IN 4Q2019
The Standard & Poor's 500 stock index posted a +9.1% gain in 4Q 2019. That's nearly as much as the average return historically earned in a full one-year period! Stocks returned +1.7% in 3Q2019 after gaining +4.3% and +13.7% in the previous two quarters and losing 13.5% in 4Q2018.
U.S. STOCKS TROUNCED FOREIGN AGAIN
The S&P 500 gained +73.9%, more than double the return on European stocks, in the five years ended Dec. 31. 2019. The +14.8% average annual return on the S&P 500 was nearly 50% more than the 10% return averaged for 200 years, according to Prof. Jeremy's book, "Stocks for the Long Run."
ALL SECTORS TURNED IN BIG 2019 GAINS
While your eye may be drawn to the 50.3% return on tech stocks, the bigger story for diversified investors was that the poorest return among the 10 S&P industry indexes in 2019 was the 11.8% on energy industry shares. All of the other industry sectors returned more than 20%!
INDEXES TRACKING 13 ASSET CLASSES
Notable in this bar chart of 2019 returns of a diverse group of 13 assets is that there was only one loser - agriculture commodities, which suffered a fractional loss of one-third of 1% for the year. The other 12 asset classes showed positive returns. Even asset classes not highly correlated with U.S. stocks gained strongly.
QUARTER BY QUARTER
The is what a roaring bull market looks like. In looking back 20 quarters, the superlative returns in the last four quarters stand out. While this indicates a reversion to the mean could be in the cards soon, the fundamentals of the economy remained strong as 2020 began.
The 60 economists surveyed in early December by The Wall Street Journal expected growth to average +1.8% over the five quarters ahead, which is line with Bureau of Economic Analysis actual quarterly gross domestic product data shown in black. Barring a "black swan" event, the expansion was poised to continue in 2020
Past performance is never a guarantee of your future results. Indices and ETFs representing asset classes are unmanaged and not recommendations. Foreign investing involves currency and political risk and political instability. Bonds offer a fixed rate of return while stocks fluctuate. Investing in emerging markets involves greater risk than investing in more liquid markets with a longer history.