Market Minute - January 15, 2019

by Scott Rosenquist, CFA

2018 Recap

The financial markets finished down last year across almost every major asset class.  You know it was a difficult year when cash was the best performing asset.  The year 2018 was almost the exact opposite from 2017, when all asset classes were positive, and cash was the worst performer.  This is quite unusual to say the least. 

 The chart below from JPMorgan’s Guide to the Markets shows the historical returns for the major asset classes.  The line going across the middle of the chart shows Asset Allocation which represents a diversified portfolio.  Note that it lies near the middle of the pack each year.  While not the best performer nor the worst, it shows less volatility compared to the individual asset classes.

Market Graphic 2019 01 15.png

 

The widely followed S&P 500 index finished in the red last year for the first time since 2008 leaving many investors wondering what 2019 will bring.  Since 1929, the S&P has declined two or more years in a row only four times.  This is certainly no guarantee of positive returns for 2019 but from a purely historical view, the broad market does not often show consecutive down years.  With that said, the headwinds I highlighted in my previous post will continue to bring volatility as we’ve already witnessed in 2019 making diversification important to help stay invested for the long term.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendation for any individual. Although general strategies are revealed, this post is not intended nor does it reflect transactions within any one account. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All data and information is gathered from accurate sources but is not warranted to be correct, complete or accurate. Investments carry risk of loss including loss of principal.  Past performance is never a guarantee of future results.

 

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