Did You Know That…?

Should GOP Investors secretly rejoice?

Since President Obama took office in January, 2009, the U.S. stock market has treated investors handsomely, posting annualized returns of about 19%. An aberration? A fluke of timing? Not if history is any guide. Since 1926 (the inception of data for the S&P 500 stock market index), the average annual total return of the S&P 500 has been 9.8%.  But when a Democrat has occupied the White House, the average annual total return has been 15.4%, while under Republican administrations, 7.8%. You can fiddle with this all you want—building in leads and lags, for example (I’ve done that), or leaving […]

Bond Market Yields and Subsequent Returns

If you click on this remarkable chart from Cambridge Associates to enlarge it to full size, you’ll see that it tells us three critically important things: 1. Bond yields are incredibly low. In fact, U.S. Treasury bond yields are at record lows. 2. If you invest in the bond market today, you can predict your return over the next five years with remarkable accuracy–because it’s going to be just about the same as today’s yield. 3. Since inflation is currently running at about 2% and is expected to rise at some point in the next few years, the prospective returns […]