Tuesday, February 18, 2020

Understanding stock market returns in 2019

I think it's fair to say that stock market returns in 2019 surprised a lot of people. The S&P500 returned approx. 30%. The MSCI World Index returned > 27%. To put this into context, over the last 90 years the average annual return for the S&P500 is just shy of 10%. In 2019, the S&P500 return was almost 3x the average. What makes this remarkable is that the general consensus going into 2019 was not exactly rosy. The sell-off in December 2018 was the worst December since the Great Depression in 1931. Economic Regimes in 2019 To understand 2019 returns, we have to...

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