Market Data Bank

4Q 2018


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S&P 500 DROPPED SHARPLY IN 4Q18

The Standard & Poor’s 500 stock index posted a -13.5% loss in 4Q 2018, following a huge +7.7% total return in 3Q2018, a +3.4% return in 2Q, and a -0.8% loss in 1Q 2018. It was the worst quarterly performance for stocks since 2011. Riskier small-caps, meanwhile, lost about 20% of their value in the quarter.

 

 


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PLUNGE ENDED 9-YEAR 11-MONTH BULL RUN

The plunge followed a spectacular bull run: nine consecutive calendar years of positive returns and a +10.8% return through the first 11 months of 2018. On December 19th, the Fed hiked interest rates a quarter-point, and 2018 ended amid heightened fear the Fed would keep raising rates and cause a recession.

 


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SECTORS SHOW GROWING APPETITE FOR RISK

Though the S&P 500 lost 4.4% in 2018, health care stocks gained 6.5%. The biggest losers were companies related to natural-resources, as slowdown fears caused share values in economically sensitive sectors to suffer the worst damage among industry sectors.

 


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INDEXES TRACKING 13 ASSET CLASSES

Atop this list of 13 asset classes sit U.S. stocks, which outperformed every other asset class in the five years through 2018. The S&P 500 index’s total return of +50% was more than six times the S&P Global ex-U.S. stock market’s return of +8%. U.S. financial economic measures were strong versus other liquid asset classes.

 


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S&P 500 AND POST-WAR EXPANSIONS

At 116-months old, this expansion, following on the 2008 Global Financial Crisis, is highly likely to exceed the longest boom in post-War history, the 120-month long stretch in the 1990s. Unless a black swan event were to occur, strong fundamentals could make this the longest expansion in modern history.

 


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EQUITY RISK PREMIUM

In the 21 years and 11 months through November 30th, 2018, the risk-free 90-day U.S Treasury Bill averaged an annual return of 2.1%, compared to a 7.2% annualized return on the S&P 500 stock index. This period encompassed two financial economic cycles illustrating the current equity risk premium.

 

 

 

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.

 

 

 

 

 

 

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SJ Boyle Wealth Planning, LLC is a registered investment advisor in the state of New Hampshire. We work as a personal financial advisor to families in Hanover New Hampshire and Vermont helping them coordinate every aspect of their financial affairs including their educational, investment, retirement and estate planning. As a Registered Investment Advisor we work in a fiduciary capacity serving their best interests first!

Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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