June was relatively flat for most stock market asset classes but capped off a very strong second quarter. Bonds have also staged a strong recovery in 2009.
Here are general stock market returns as of June 30, 2009:
| |
2nd Qtr 2009 |
Year to Date 2009 |
Last 12 Months |
Last 3 Years |
Last 5 Years |
| S&P 500 US Large Co Stocks |
+15.9% |
+3.2% |
-26.2 |
-8.2% |
-2.2% |
| S&P MidCap 400 |
+18.7% |
+8.5% |
-28.0% |
-7.5% |
+0.4% |
| S&P Small Cap 600 |
+21.1% |
+0.7% |
-25.3% |
-9.6% |
-0.9% |
| MSCI US REIT Index |
+30.2% |
-12.4% |
-43.7% |
-18.5% |
-2.9% |
| MSCI EAFE Int'l Stocks |
+25.8% |
+8.4% |
-30.9% |
-7.5% |
+2.8% |
The stock market rally that began March 9, 2009 begs the question, “Is this the beginning of a new bull market or a cyclical bull market rally in a secular bear market?” Recognizing that these terms aren’t household language, a rising stock market is a bull market and a falling stock market is a bear market. A secular market trend is many years and a cyclical market trend is a shorter period within a longer secular trend. According to The Wall Street Journal, Ned Davis Research (a market analysis firm well known for long-term studies) reports that we entered a secular bear market in late 2001. Ned Davis Research considers this the fourth secular bear market since 1900, with the last one lasting from 1966 to 1982. Secular bull markets have lasted from six to 24 years and secular bear markets have run from 13 to 16 years. Cyclical bull markets within secular bear markets have averaged 64% gains but only lasted about 18 months. Whether we are entering a new bull market or still in a bear market, this supports our thesis that stock market returns in the 2010 to 2012 period (or possibly a few years later) may be above long-term averages and the decades ahead could be rewarding for the patient investor.
As always, your trust and confidence are important to us and we appreciate the opportunity to serve you! Please contact us with any questions you have.
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