Home   Logon   Mobile Site   Research and Commentary   About Us   Call 1.800.621.1675 or Email Us       Follow Us: 

Search by Ticker, Keyword or CUSIP       
 
 
 
Blog Home
Bob Carey
Chief Market Strategist
Click for Bio

Follow Bob on Twitter Follow Bob on LinkedIn View Videos on YouTube
 

  How Some Traditional Asset Classes Have Fared Since Treasury Yields Peaked In 1981
Posted Under: Conceptual Investing

 

View from the Observation Deck 

  1. The date was 9/30/81. That was the day that the yield on the benchmark 10-year Treasury note (T-note) reached its all-time closing high of 15.84%, according to data from Bloomberg. It stood at 2.45% on 1/31/17.
  2. The average annualized total returns and price changes in the chart represent the period from 9/30/81 through 1/31/17 (35.4 years).
  3. As indicated in the chart, of the five traditional asset classes, excluding the Consumer Price Index (CPI), only real estate (FTSE NAREIT All Equity REITs Index) and stocks (S&P 500 Index) posted double-digit average gains.
  4. One of the most basic goals in investing is to outpace the rate of inflation over time. On average, all five asset classes outpaced inflation, as measured by the CPI, though the price of gold bullion just barely edged it out.
  5. The 2.90% average annualized rate on the CPI was not far off the historical norm. From 1926 through 2016, the average was 3.00%, according to data from Bloomberg.
  6. As noted in point #1, the yield on the 10-year T-note stood at 2.45% on 1/31/17. That is up from the all-time low of 1.36%, set on 7/6/16, but still below the typical rate of inflation over time, according to Bloomberg.  

This chart is for illustrative purposes only and not indicative of any actual investment. The illustration excludes the effects of taxes and brokerage commissions and other expenses incurred when investing. Investors cannot invest directly in an index. The Consumer Price Index (CPI) measures the prices paid by consumers for a market basket of goods and services. The BofA Merrill Lynch US 6-Month Treasury Bill Index is comprised of a single issue purchased at the beginning of the month and held for a full month. At the end of the month that issue is sold and rolled into a newly selected issue. The BofA Merrill Lynch 7-10 Year U.S. Treasury Index tracks the performance of U.S. dollar denominated sovereign debt publicly issued by the U.S. government in its domestic market. The S&P 500 Index is a capitalization-weighted index comprised of 500 stocks used to measure large-cap U.S. stock market performance. The FTSE NAREIT All Equity REITs Index is a free float adjusted market capitalization-weighted index that includes all tax qualified REITs listed on the major U.S. exchanges.

To Download a PDF of this post, please click here.

Posted on Thursday, February 16, 2017 @ 2:08 PM • Post Link Share: 
Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
Search Posts
MARKET ANALYSIS
Market Commentary and Analysis
Market Commentary Video
Weekly Market Commentary
Weekly Market Watch
Monthly Talking Points
Quarterly Newsletter
Market Observations
Subscribe To Receive Email
 


 PREVIOUS POSTS
A Snapshot Of Fixed-Rate Bond Yields & Total Returns
US Stocks Ended Feb. 10, 2017
US Economy and Credit Markets Ended Feb. 10, 2017
Investors Would Like To See Bank Margins Rise Along With Interest Rates
A Snapshot of Growth vs. Value Investing
It's Called Winning!
US Stocks Ended Feb. 3, 2017
US Economy and Credit Markets Ended Feb. 3, 2017
S&P 500 Index Stock Prices Relative To Their 52-Week Highs
Back to Earnings: Back to the Basics
Archive
Skip Navigation Links.
Search by Topic
Skip Navigation Links.

 
The information presented is not intended to constitute an investment recommendation for, or advice to, any specific person. By providing this information, First Trust is not undertaking to give advice in any fiduciary capacity within the meaning of ERISA, the Internal Revenue Code or any other regulatory framework. Financial professionals are responsible for evaluating investment risks independently and for exercising independent judgment in determining whether investments are appropriate for their clients.
First Trust Portfolios L.P.  Member SIPC and FINRA. (Form CRS)   •  First Trust Advisors L.P. (Form CRS)
Home |  Important Legal Information |  Privacy Policy |  California Privacy Policy |  Business Continuity Plan |  FINRA BrokerCheck
Copyright © 2022 All rights reserved.