On October 9, 2007, the Dow hit its pre-recession high. By March 5, 2009, it had dropped more than -50%. The S&P 500 dropped almost -55% over the same period.
Just writing that sentence I feel sort of crushed. Those were dark days.
Over the same period, gold (ticker GLD) was up 26% and plain old vanilla AGG was up almost 8%. Does that un-crush me?
Sort of.
Over the long-run, the Dow and the S&P500 are the serious - serious - outperfomers.
Since 1976 the Dow Jones Industrial average is up more than...10,000% The S&P 500 is up almost 8,000%.
High quality bonds? Meh. Up 2,000%.
Gold? Meh. Meh. Up 950%.
Over long periods, bonds and gold - on a total return basis - so underperform.
So why are we starting to talk about adding these long-term losers?
Well, during recessions, they're the real winners. And while we're not there yet, we know we'll get there. It's another reason active management matters.
Weekly Update, Week Ending June 14, 2019
The S&P 500 was up 53bps even as the Dow Jones gained 46bps, the Russell 2000 added 58bps and the Nasdaq increased 73bps.
As for US bonds, they added 2bps.
Globally, the MSCI World Index increased 24bps and the Barclays Global Aggregate Bond Index declined 34bps.
The Euro Stoxx 50 added 9bps in local-currency (Euro) and lost -1.06% in USD. Meanwhile, the Topix was up 93bps in local-currency (Yen) and 53bps in USD.
