A Few Quick Thoughts

The headlines will say that last year was a lost year in terms of investing.  The reality is that if 2018 had ended in in August then most of the world would be reporting nice gains instead of losses.  The market's decline was due to investor uncertainty on a whole host of fronts.  We listed some of those back in December.   We'll revisit them again in the coming weeks as they haven't gone away.  Markets hate uncertainty and until some of this is cleared up we're going to have to get used to the volatility.  

The economy is in better shape than the markets.  I also don't believe based on what we know today that we are headed into a situation similar to 2008-2009 because the financial system is in much better shape than it was back then.  Again this is something we'll discuss going forward.  

I haven't had time to look too deeply in the numbers in terms of asset performance but let's just say it was punk.  Early reads and back of the envelope calculations look like a diversified portfolio of assets lost somewhere between 6-10% last year on a total return basis.  Only three sectors in the S&P 500 posted positive returns in 2018.  These were Utilities consumer discretionary and health care.  Owning an equal weighted basket of the index lost you on a preliminary basis abut 7% last year.

International markets, which were some of the biggest winners in 2017 probably posted the worst losses last year.  On average these look to have been down in excess of 10%.

I'll be back with more in the coming days.  I will be back posting here on Friday.

*Long ETFs related to the S&P 500, international markets and health care in client and personal accounts.