We had a GREAT 2009! Before we elaborate on 2009, let’s start by reviewing our motto for 2009. Quoting from “Fun Facts To Know and Tell” dated January 2009:
“Here is our motto for 2009: Let’s look forward, not back! Calendar year 2008 was clearly one for the record books and one that we want to put behind us. As we begin 2009 it is a great time to be a patient, diversified long-term investor.”
Being a patient, diversified investor clearly paid off in 2009. Despite January, February and early March 2009 trying our patience like never before, the stock market rallied starting in mid-March to end the year with gains over 25% in all stock asset classes, with many stock asset classes registering gains in the 30% to 40% range. Our strategy excels in a market environment where US Large Company stocks are outperformed by other asset classes and, despite the Standard & Poor’s 500 index of US Large Company stocks being up over 26% in 2009, all of the other stock asset classes did even better!
For the decade ending 2009 (we’ll leave it up to others to debate whether the decade began in 2000 or 2001), US Large Company stocks actually had a negative 0.95% annualized return, marking the worst decade since stock records started in the 1820’s and even worse than the 1930’s, which encompassed the Great Depression. The past decade suffered from both the 2000 to 2002 tech bubble and the 2008 global financial meltdown. What should we do? “Let’s look forward, not back! ” We are not saying that we are out of the woods yet and there are still serious economic problems, but looking beyond the next few years at the balance of the decade there are reasons to be optimistic.
For your “Fun Facts…” trivia, January is often considered a bellwether month for the year. From 1900 to 2009, according to Ned Davis Research, if the Dow Jones Industrial Average is up for January, the median gain for the year was 10.4%. If it was down, the gain was only 0.3%. Such indicators are never foolproof, as the Dow was down in January 2009 but ended up strongly for the year. Makes for fun small talk, right?
One thing will not change in 2010: our commitment to cutting edge academic research in our investment strategy and our focus on comprehensive personal financial planning for your complete financial picture! Happy New Year 2010! |
