We’ve recently experienced a market in which the rising tide of global central bank easing has lifted virtually all boats. With everything going up regardless of price or quality, has diversification through active management lost its sheen? The rolling returns for the S&P 500® Index provide a crystal-clear illustration of the reality of market cycles.
Modern global capital markets are incalculably complex. However, we must still attempt to navigate them in order to achieve good financial outcomes. Virtus offers perspective on understanding markets more clearly.
Brief and colorful insights focused on major market trends.
2018 marked the first down year for the U.S. equity market since 2008. The 2009-2017 stretch ties as the longest annual winning streak in market history. Until the fourth quarter, markets were buoyant, but political instability at home and abroad, rising interest rates, and a potential growth slowdown rattled global markets. Other than cash, all asset classes ranged between flat and down.
Nearly a decade into the post-2008 crisis era, this bull market has featured not just sizable returns and relatively little volatility, but strong leadership from a group of powerful, headline-grabbing companies: the “FAANG” stocks (Facebook, Apple, Amazon, Netflix, Google). Diversified portfolios can own these stock market darlings, but are not structured to keep pace with them.
Even when investors abide by tried and true principles, success in the markets is hard because history never repeats. For example, value investing—buying stocks that are cheaper than the overall market—has been a winning strategy for much of the last century. Yet for much of the post-crisis era, growth investing has prevailed, thanks largely to technological innovation in the digital economy. Buying cheaper has not kept pace with chasing trends.
A picture is worth a thousand words. In each issue, we present one insight on a range of market, investment strategy, and behavioral topics. The 1000 Words Series is designed to provoke insightful and memorable conversations.
Market leadership changes from year to year and predicting the winning style is impossible. These tables highlight the importance of diversification.
Monthly market review podcasts featuring Virtus' Chief Market Strategist Joe Terranova.
Monthly market review podcast featuring Virtus' Chief Market Strategist Joe Terranova and Director of Investment Education Brian Portnoy, Ph.D., CFA.
What should be on investors’ minds as they sent their kids off to school in September and focus on their portfolios once again? Virtus Chief Market Strategist Joe Terranova discusses this and other timely investment topics with Brian Portnoy, Director of Investment Education in the latest monthly installment of the Virtus Vital Signs podcast.