Msci, SNP, Eighty-Three Percent discussed on The Kristen Hagopian Show
Of the S and P five hundred and MSCI emerging market index and simply reversing their order. So instead of starting with January two thousand and ending in September twenty eighteen we start with the September twenty eighteen performance and end with January two thousand to show how the timing of market cycles can impact these results. Here you go the actual results. January two thousand to September twenty eighteen s and p five hundred three hundred one thousand as I said MSCI emerging markets two hundred and fifty five thousand reverse the order. Starting with September. Twenty eighteen returns all the way backwards in time to January two thousand returns, the S and P five hundred a hundred and thirty nine thousand not three hundred grand the MSCI index two hundred forty two thousand significantly better. So. The the concept here is something called mean. Reversion? And the reason that diversification works is because usually the markets revert back to their mean returns, as you know, the standard and Poor's five hundred mean return is probably just shy of ten percent. So looking back from two thousand two thousand nine the SNP dropped minus nine percent. European stocks were up twenty seven. Mid cap. Stocks are up sixty two. High yield bonds are up Eighty-three percent bonds in general or up. Eighty five percent small-cap stocks are up eighty five percent emerging markets route one hundred and sixty two percent. And wreaths were up one hundred and seventy five percent during a time where the SNP did nothing. Returns from twenty ten to twenty fifteen SNP one hundred and eight percent European thirty mid caps. One hundred sixteen high yield forty four bonds just twenty-five small-cap one hundred seventeen emerging markets minus five point one eight reits up one hundred and twenty nine percent. Total returns from nineteen ninety four the nineteen ninety nine to give you again, perspective S and P five hundred two hundred and fifty six unbelievable. European one hundred and eighty five mid-cap one hundred.