Global Financial Crisis – Gone but not forgotten

2018 sees the Global Financial Crisis (GFC) washed out of 10 year reported returns.

“Forget Dow 25000. Every year is full of surprises, but there are a few things every investor should expect to see happen in 2018.”

What does this mean?

 

Currently when we look at investment performance on average over the past 10 years (S&P500 returned 6.2% per annum). This takes into account the GFC which, as you can imagine is a heavy anchor for subsequent years.

From November of this year, Wall Street Journal columnist Jason Zweig reminds us this will no longer be the case. Zweig points out to us how the S&P500 returns will shoot up to 11.5% per annum with nothing changing at all (other than the calendar date).

He reminds us to keep this in mind when we find ourselves becoming seduced by large investment firms boasting their terrific turn of fortunes (due of course to diligent money management).

“Stocks will then look much more attractive in the rear-view mirror, even though nothing will have changed but the calendar. Don’t believe the hype.”

Zweig goes on to talk bond markets and volatility but i’ll leave that for you to check in his article below.

I’d be delighted to hear your thoughts!

Credit – The Wall Street Journal Four Things Sure to Happen in Markets During 2018 – Jason Zweig 5 January 2018

https://blogs.wsj.com/moneybeat/2018/01/05/four-things-sure-to-happen-in-markets-during-2018/?reflink=e2twmkts