Large U.S. stocks have been absolutely dominant in recent years. The S&P 500
has produced a 16% annualized return over the past 5 years, easily placing it atop
of the worlds 45 largest equity markets (which returned an average 2.7% over the
same period!). Similarly, the performance of large U.S. stocks has been a world
apart from other asset classes as well. Over the past twelve months, the S&P 500
has returned 19.7%, easily outpacing its longer-term historical return of 8.4%
while the average asset class (excluding the S&P 500) returned only 3.9% over
the past year, well below historical averages.
These spectacular results for the S&P 500 ironically come after many had given
up on the U.S. market following the 2008 credit crisis. Today, Wall Street has
once again grown very optimistic toward large U.S. stocks yet Main Street
sentiment toward the economy remains subdued and skeptical. Who is right?
The following pages provide insight into the dichotomy in sentiment, as well as
the performance and value of U.S. assets relative to other asset classes.
View the full Quarterly Market Report by downloading the PDF.