It’s been a long, strange trip in the nearly two years since October 2007, when the U.S. stock market peaked. The details of the journey have been dissected ad infinitum, on a tick-by-tick basis. But what of the big picture? How does a broad review of performance among the major asset classes stack up since October 2007?
We can start by considering total return indices for the usual suspects by setting benchmarks to 100 for everything as of the close of October 2007. The chart below shows how the major asset classes have performed since then through the end of August 2009. (For the underlying indices that represent the asset classes see our post here.)
Another view on the same history is presented in our second chart below, which ranks the total returns for October 2007 through August 2009.
We spend a lot of time analyzing the major asset classes on the pages of The Beta Investment Report. The primary goal is searching for some perspective in managing multi-asset class portfolios and squeezing out a bit more return without taking on more risk. That begins by considering the rebalancing opportunities related to comparing performance. That’s the easy part. By that standard, foreign government bonds appear to need some trimming while buying REITs looks productive, for instance, relative to results from October 2007 through last month.