This time of the year I like to look through some of my performance spreadsheets to see how things are going in various investment areas. What a difference a year makes, here are some of my observations (all YTD Return numbers below are as of July 13, 2021).
S&P 500 has been steadily trending up all year and hasn’t been too far from all-time highs. The biggest pullback of 2021 so far was 4% back in early March and there’s been a couple of other 2-4% dips. On average the index has been within 0.7% of its high, which is a remarkable lack of price volatility.
Asset classes
- With the exception of bonds and gold, most major assets are up
- In an amazing turnaround, oil is up 55% this year (remember when it hit negative $37 a barrel?!)
- Domestic stocks are still the best game in town outperforming everything else
- Developed foreign stocks are doing pretty well also, while emerging markets are lagging
- Bitcoin and Gold are the only assets that are double digit percentage off their 52-week highs, while most others are within couple of percent
Sectors & Industries
- Related to oil price comment above, all manner of energy stocks are doing great (but look a still horrible longer-term returns)
- After a poor 2020, financials and real estate are having a strong year
- Homebuilders too, driven by a tight housing market
- Technology areas is holding up fine but are no longer the leaders
- Defensive sectors are at the bottom as investors bet on strong recovery
Foreign stocks
- Of the major countries Canada and Russia are in the lead (again, oil price related)
- U.S. is not far behind though
- European nations are doing ok
- China and Japan are at the bottom so far this year
Fixed Income
- After a massive 2020, most bonds flavors are taking a break as interest rates bounce off all-time lows
- Riskier and equity-like instruments are doing best which is not surprising given stock performance
- Rate-sensitive groups are down close to 10% but again, look at 2020 returns to put things in perspective
- Moreover, 10-year Treasury rate topped out in March and has been dropping lately as investors fret about strength of the recovery, which is driving bond prices up
