Nowhere to Make Money in 2015

landscape of city and mountains

This past year in the markets was a roller coaster ride with a remarkably tepid ending. Several big events happened globally that, in the end, disrupted just about every investment asset class, with the end result being a range between essentially a flat return for most developed equity markets, to slightly negative for most other major asset classes and even significant losses for a few peripheral areas.

Here is a quick recap:

Asset Class Indexes 2015 Returns
Large Company Stocks S&P 500 1.4%
Small Company Stocks Russell 2000 -4.4%
International Stocks MSCI EAFE Index -0.4%
Emerging Markets MSCI Emerging Markets -14.6%
Bonds Barclays Capital Agregate 0.5%
High Yield (Junk) Bonds Barclays US Corp HY Index -4.5%
Emerging Market Bonds JP Morgan EM Global Index -14.9%
Commodities Bloomberg Commodity Index -24.7%
Real Estate (REITs) NAREIT Equity REIT Index 2.8%
Asset Allocation 55% Stocks/35% Bonds/10% Other -2.0%
Cash Cash 0.0%

*includes reinvested dividends

One of the widely-accepted tenants of modern day asset allocation is that by simply spreading your money around among various asset classes, you’re likely to have at least one big winner, even if not all bets are hitting on all cylinders. However, last year was uniquely resistant to that pattern. In fact, according to Bianco Research and Bloomberg, you have to go back nearly 80 years to find a year where none of the major assets classes were up significantly and all the way back to 1995 to find one where at least one class did not return at least 10% or more.

Several major events occurred in the markets to cause this event, including a historic drop in the price of oil, turmoil in emerging markets, weakened demand for global commodities, fear of a Chinese recession and a dramatic increase in the US dollar.

In our quarterly commentary (coming out soon), we will go into more depth into these issues and how they may affect various investment classes in the future.