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Short-Term Returns for the Major Asset Classes

by: Richard Shaw August 08, 2008 | about stocks: AGG / IWV / USO / UUP    
Richard Shaw

Richard Shaw

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Commodities have been tanking lately, while REITs have been rising.  US stocks have turned up while international stocks have not — a currency effect in part.  US bonds have been weak lately (perhaps in anticipation of future rate hikes) and US stocks have risen.

click image to enlarge

This data is for a moving 52-weeks, not a calendar year, but comparison with calendar results could be interesting.

In the last 18 full calendar years, the Lehman Aggregate bond index (AGG) has been down only twice (1994 and 1999, down 2.02% and 0.82% respectively).  Bonds are still up for 52 weeks, even though they have been weak lately.

In the past 16 full calendar years, the Russell 3000 (IWV) has been down only 3 times (2000, 2001, and 2002, down 7.46%,  11.46%,  and 21.54% respectively). So far, 2008 seems ready to make it 4 down years out of 17, but stocks have rallied significantly as oil has tumbled and the dollar has risen.

The US Dollar (UUP) is rising against a trade weighted basket of currencies and crude oil (USO) is down.  Some of the fall in the price of crude is due to the rise in the Dollar, because crude is priced globally in Dollars.  However, that is a relatively minor contribution to the fall in oil.

A diversified basket of commodities (DJP) is down essentially one-for-one with crude oil, although that basket did note a one-for-one rise with oil.

The current environment is so unusual that it is difficult to draw too many conclusions from the past.

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