Never underestimate the power of momentum.
That’s a timely observation as we gaze at the year-to-date returns for the major asset classes through last night’s close. Save for commodities, which have been struggling for months, red ink remains in exile on the performance ledger for the broad asset classes.
As our table below reveals, it’s been hard to lose money so far this year. In some corners, it’s been really, really hard.

Perhaps the most extraordinary number on the board above is the 10.9% return, which is claimed by REITs. Yes, dear readers, that’s 10.9% for year so far–and we’re only halfway through February!
As impressive as REITs are so far in 2007, it’s even more so when you consider that 1999 was the calendar year last when the asset class suffered a bout of red ink. Suffice to say, after rallying for so long and so hard, the year-to-date gain for REITs looks excessive at the moment. No, we’re not predicting a bear market in REITs (that may not happen until every last man, woman and child on the planet has committed money to the asset class). That will come…one day. Meanwhile, perhaps a bit of water-treading in store for REITs. But, hey, what do we know?
Returns so far this year are otherwise relatively modest, but again, it’s only February. That said, what’s striking is the fact that everything beyond commodities is running higher–again. Starting in 2003, the asset classes listed above have posted gains for each and every calendar year. (Commodities arguably lost money last year, although that depends on the index. The oil-heavy Goldman Sachs Commodity Index slipped in 2006, but the Dow Jones-AIG Commodity Index posted a small rise).
The generally ongoing bull-markets-as-far-as-the-eye-can-see trend compels one investment strategist to gaze in wonder when it comes to equities. “The global stock market meltup up is turning into a global stock market blastoff,” wrote Ed Yardeni, chief investment strategist at Yardeni Research, in an email to clients this morning. “It shows perhaps one of the Great Wonders of the modern world,” he continued. “I don’t ever recall seeing so many stock markets going straight up. I take that back: The same thing happened at the beginning of last year.”