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
 

  One Perspective On How Stocks Have Performed So Far In This Millennium
Posted Under: Broader Stock Market

 

View from the Observation Deck 

  1. Today's blog post features the cumulative total return performance of five major equity indices (three domestic and two foreign) since the start of 2000. 
  2. We chose to highlight 5-year periods due to the fact that equity investors endured two severe bear markets from 2000-2016, with the first one commencing in March 2000 (tech bubble).
  3. Emerging markets equities clearly performed the best in the first decade, but have underperformed the U.S. indices markedly in the current decade.
  4. Mid- and small-capitalization stocks in the U.S. have performed the best in the current decade, but also performed relatively well in the first decade.
  5. Points 3 and 4 indicate that investors were willing to assume some additional risk in the markets despite all of the negative events occurring around the globe, in our opinion.
  6. Here are just a few of those events: 9/11 terrorist attacks in U.S. (2001); Invasion of Iraq/2nd Gulf War (2003); U.S./Global financial crisis (2008-2009); Greek debt crisis (2009); U.S. stock market flash crash (2010); Japan's tsunami/9.0 earthquake (2011); and the UK's decision (Brexit vote) to leave the European Union (2016).
  7. For all of the discussion in the financial press about how expensive stocks appear to be these days, particularly in the U.S., we believe the level of returns posted from 2000 through 2016 may suggest otherwise.
  8. From 12/31/99-12/31/16, the average annual total returns for the five indices in the chart were as follows: 4.51% (S&P 500); 9.53% (S&P MidCap 400); 10.04% (S&P SmallCap 600); 2.45% (MSCI Daily TR Net World ex-U.S. in USD); and 5.84% (MSCI Daily TR Net Emerging Markets in USD), according to Bloomberg.
  9. For comparative purposes, from 1926-2016, data from Ibbotson Associates/Morningstar shows that the average annual total returns on the S&P 500 Index and its benchmark for small capitalization stocks were 10.04% and 12.12%, respectively. 

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 S&P 500 Index is a capitalization-weighted index comprised of 500 stocks used to measure large-cap U.S. stock market performance. The S&P MidCap 400 Index is a capitalization-weighted index that tracks the mid-range sector of the U.S. stock market. The S&P Small Cap 600 Index is a capitalization-weighted index that tracks U.S. stocks with a small market capitalization. The MSCI World (ex-U.S.) Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets excluding the U.S. The MSCI Emerging Markets Index is a free float-adjusted market capitalization index that is designed to measure equity market performance of emerging markets.

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

Posted on Thursday, May 25, 2017 @ 1:36 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


 PREVIOUS POSTS
The Outlook For S&P 500 Index Earnings Reflects Strength Through Year-End
US Stocks Ended May 19, 2017
US Economy and Credit Markets Ended May 19, 2017
Investors Don’t Have To Settle For A 2.00% Stock Dividend Yield
A Snapshot Of Moving Averages
US Stocks Ended May 14, 2017
US Economy and Credit Markets Ended May 14, 2017
Consumer Stocks Have Delivered Strong Performance Over The Past 25 Years
The Real Rate Of Return On The 10-Year Treasury Is Real Low
The 5.1% Difference
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.