As shown in the charts for the fourth quarter of 2018 and the year as a whole, 2018 was a difficult one for equity investment returns across the board.
SEE MOREAfter a period of relative calm in the markets, in recent days the increase in volatility in the stock market has resulted in renewed anxiety for many investors. From September 30–October 10, the US market (as measured by the Russell 3000 Index) fell 4.8%, resulting in many investors wondering what the future holds and if they should make changes to their portfolios.
SEE MOREThe second quarter of 2018 saw positive returns from the US stock and global real estate markets. Both international developed and emerging market stocks were down, while bonds remained mostly flat. This is another good reminder that US and international stocks do not always move together, making a long-term, globally diversified approach a worthwhile one.
SEE MOREAfter a very positive – and in many ways, surprisingly calm – year in the markets in 2017, 2018 has gotten off to a more volatile start. While markets were mostly down at the end of the first quarter, there have already been five weeks in 2018 which produced higher performance than any week in all of 2017. There have also been four weeks which produced lower performance than any week in 2017.
SEE MOREFor the fifth quarter in a row (Q4 2016 through Q4 2017), US stocks, international developed stocks, emerging markets stocks, and global real estate investments have been up. For the third quarter in a row (Q2 2017 through Q4 2017), both stocks and bonds have been up. Additionally, for the first three quarters of 2017 we saw both international developed and emerging market stocks outperform US stocks. In Q4 2017, emerging market stocks continued to outperform US stocks.
SEE MOREGlobal stock markets again rose during the third quarter of 2017. This marks three straight quarters of positive stock market growth and two straight quarters of positive growth across both stocks and bonds. International stocks outperformed US stocks in Q3, as we saw last quarter.
Of ClearLogic’s 10 Investment Principles for long-term conservative growth, most at play this quarter were “let markets work for you”, “embrace market timing”, and “don’t try to outguess the market”.
SEE MOREGlobal stock markets again rose during the second quarter of 2017. Additionally, both US and international bond markets were up, making the second quarter of 2017 positive across the board. Last quarter, we noted that international stock markets outperformed US stock markets, reversing a trend we had seen over the past few years. The reversal continued this quarter with international stocks returning about double what the US stock market returned.
Of ClearLogic’s 10 Investment Principles for long-term conservative growth, most at play this quarter were “look beyond the headings”, “practice smart diversification”, and “let markets work for you”.
SEE MOREGlobal stock markets rose sharply in the first quarter of 2017. Over the past few years, US stock markets have outperformed international stock markets, but this quarter reversed that trend. Emerging market stocks in Q1 saw returns that were double that of the US markets, while international developed stocks outperformed US stocks as well. Only international bonds suffered negative returns in the first quarter.
Of ClearLogic’s 10 Investment Principles for long-term conservative growth, most at play this quarter were “avoid market timing”, “resist chasing past performance”, and “practice smart diversification”.
SEE MOREThe 4th quarter market returns below may surprise you. Here in the U.S., Donald Trump’s victory dominated the news. In the financial news, the unexpected rise of the markets post-Trump victory was the top story. But as you can see below, only the U.S. stock market increased. All other markets in a diversified portfolio decreased, and some quite substantially.
SEE MOREAs is often the case from quarter to quarter, a different stock asset class led performance returns this quarter: emerging market stocks. International Developed stocks outperformed US stocks for the first time this year. Global Real Estate has been the top performer over the past two years, but had its worst quarterly performance since the second quarter of 2015 and was the only asset class with negative returns. These are all good examples of why we do not chase performance or try to forecast asset class returns.
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