{"id":6503,"date":"2020-01-14T11:06:28","date_gmt":"2020-01-14T17:06:28","guid":{"rendered":"https:\/\/schenkelberg.investments\/?p=6503"},"modified":"2020-01-14T11:06:45","modified_gmt":"2020-01-14T17:06:45","slug":"hindsight-is-20-20","status":"publish","type":"post","link":"https:\/\/schenkelberg.investments\/?p=6503","title":{"rendered":"Hindsight is 20\/20"},"content":{"rendered":"\n

Wow, what a year! Not much to complain about when it comes to investment\nreturns for 2019. All major diversified stock indices advanced over 20%. The\nStandard and Poor\u2019s 500 Index led the way with a 29.7% total return. Technology\nstocks were the clear winners once again, with iShares S&P 500 Information\nTechnology Sector ETF (XLK) up over 50%. Aside from a couple of minor hiccups\nstocks seemed to advance at a steady pace. <\/a><\/p>\n\n\n\n

Information Technology is a\nlarge part of the S&P 500 Index. \nStocks in this sector represent 23.2% of S&P 500 market cap. The\nnext closest sector is Health Care, which is 14.2% of index market cap. With\nthe Technology Sector representing such a large part of the S&P 500 index,\nits performance is a strong driver of overall performance. Conversely,\nInformation Technology is a much smaller portion of the international index.\nInformation Technology represents 8.4% of the MSCI All Country World Index\u2013ex\nU.S. With technology stocks far outpacing other sectors, it is difficult for\nother indices to keep up with the S&P 500. <\/p>\n\n\n\n

Investors enjoyed the best of\nboth worlds, with bonds also advancing at a solid pace. The iShares Aggregate\nBond ETF rose over 8%.  Falling interest\nrates from the Federal Reserve positively impacted stocks and bonds. Bond prices\ntend to rise as interest rates fall, as investors become willing to pay more\nfor bond income than they would previously. Stocks also reacted positively to\nlower interest rates with the prospect that companies and investors will be\nable to borrow at lower rates, thus prompting ongoing economic investments.<\/p>\n\n\n\n

It\u2019s always great to celebrate a positive year. In times of larger\npositive or negative returns it\u2019s also good to keep historical performance in perspective. The chart below illustrates the\nbest and worst rolling returns for various time periods from 1973 through\nmid-2009. It\u2019s evident that returns over the one-year period can be quite\nvolatile. As we move to longer time frames, the highs and lows for rolling\nreturns become smaller and start to smooth out.<\/a><\/p>\n\n\n\n

Most notable is the prominence\nof higher returns versus low over the years. As we get toward five years and\nlonger, the prospect of negative returns becomes extremely low. In fact, from\n1973 to mid-2009 there has not been a 15-year period with a negative S&P\n500 return.<\/p>\n\n\n\n

While it is nice to think about\navoiding those larger negative one-year returns, it doesn\u2019t always pay to jump\nin and out of the market. Staying invested during the ups and downs can pay off\nnicely over the longer term. Coming into 2020 it\u2019s important to keep this\nlong-term perspective. Political risk is starting to heat up. International\nconflicts, an impending impeachment and a competitive U.S. presidential race\ncould provide bumps in the road. However, predicting these bumps in the future\nis not always easy. <\/p>\n\n\n\n

What we can rely on is the historical odds based on the data we can see for certain. These data indicate that investing at any starting point and planning for your personal future is most important when managing the growth in the investment landscape.<\/p>\n\n\n\n

www.thebalance.com<\/a><\/p>\n\n\n\n

rolling returns from 1973 \u2013 mid 2009<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Wow, what a year! Not much to complain about when it comes to investment returns for 2019. All major diversified stock indices advanced over 20%. The Standard and Poor\u2019s 500 Index led the way with a 29.7% total return. Technology stocks were the clear winners once again, with iShares S&P 500 Information Technology Sector ETF […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[119,123],"tags":[],"class_list":["post-6503","post","type-post","status-publish","format-standard","hentry","category-market-commentary","category-market-performance"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p7kXxe-1GT","jetpack-related-posts":[{"id":6578,"url":"https:\/\/schenkelberg.investments\/?p=6578","url_meta":{"origin":6503,"position":0},"title":"S&P 500 Leaders – What Drives S&P 500 Index Performance","author":"J.J. Schenkelberg, CFA","date":"October 15, 2021","format":false,"excerpt":"When investors turn to market newsmakers they are often given S&P 500 index performance as a proxy for how the stock market has performed for the day, week, month, year. 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Schenkelberg, CFA","date":"October 10, 2024","format":false,"excerpt":"IndexThird Quarter 2024Year\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 To-Date 2024S&P 5005.5%20.8%Dow Jones Industrial Average8.2%12.3%Russell 20009.2%10.0%\u00a0\u00a0MSCI All Country World Index ex-US7.7%13.8%\u00a0\u00a0Aggregate Bond5.2%4.6% Performance Source: Koyfin Price Return U.S. Versus International The S&P 500 Index, an index of large U.S. companies, posted a price return of 5.5% for the Third Quarter of 2024. Large U.S. stocks underperformed\u2026","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":6519,"url":"https:\/\/schenkelberg.investments\/?p=6519","url_meta":{"origin":6503,"position":2},"title":"Superstars of the Indices","author":"J.J. Schenkelberg, CFA","date":"July 9, 2020","format":false,"excerpt":"Diversification is a key piece of a portfolio that is looking to control risk. 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The rationale behind this technique is\u2026","rel":"","context":"In "Market Commentary"","block_context":{"text":"Market Commentary","link":"https:\/\/schenkelberg.investments\/?cat=119"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/07\/Pie-Graph.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/07\/Pie-Graph.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/07\/Pie-Graph.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/schenkelberg.investments\/wp-content\/uploads\/2020\/07\/Pie-Graph.png?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":6769,"url":"https:\/\/schenkelberg.investments\/?p=6769","url_meta":{"origin":6503,"position":3},"title":"Power at the Top. 10 Stocks Continue to Drive S&P 500 Performance","author":"J.J. 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