Stocks posted their worst returns since 2008 last year. Most of the damage occurred in the fourth quarter when stocks dropped 13.5%. This was the 12th worst quarterly performance since the Great Depression.
The stock market declined by 4.4% in 2018. It was the first year stocks posted a loss since 2008. The S&P 500 rose 20% in 2017, 12% in 2016, and more than 13% annualized over the last decade. Yet, a one-year decline of 4% has caused all sorts of consternation. I admit that the peak-to-trough loss was much larger (17.5% so far), and the fourth quarter was one of the worst on record (down 13.5% in just three months).
They say all the world loves a clown. That may be true, but one thing I know that is even truer is that all the world currently hates alternative investments.
Interestingly, cash was the best performing asset class in 2018, earning 1.8%. That’s a pretty meager return, but it was better than losing money in stocks or breaking even in bonds.
Prince, or the artist formerly known as Prince, or whatever his name ultimately was, made headlines throughout his life for his talent and eccentricities. However, the headlines after his death in 2016 revolved around the fact that he died with an estimated $200 million estate and no documents in place to guide its disposition.
The diversification of an investment portfolio has been described as the one “free lunch” in the investment world. That is because holding a portfo¬lio of assets with unique risk and return characteristics can result in higher long-term returns and a lower risk profile.
October has come and gone, which is likely a relief for investors. October gets a bad rap when it comes to the stock market, and perhaps deservedly so: It was October of 1929 when the slide into the Great Depression began in earnest with a 20 percent dip in the stock market. It was also October, in 1987, when Black Monday resulted in the stock market falling over 20 percent in a single day. October of 2008 saw stocks decline 17 percent.
The third quarter of 2018 was a mixed bag for investors. Stocks, at least domestic stocks, performed admirably. The S&P 500 rose 7.7% in the quarter and is now up 10.6% year-to-date. Small-cap stocks have performed even better so far this year, rising 14.5%.
The mid-term elections are right around the corner. That means that the phone is ringing with questions about how the elections could impact the stock market. Generally, we prefer to keep politics and investing separate, but we grudgingly accept that they can influence one another in the short run.
October 1st was our ten-year anniversary. It is true that Armbruster Capital was incorporated a little over nine years ago. However, Mark started working at our predecessor firm, and building what would become Armbruster Capital, a decade ago.