Student of the Market - July 2021
Stock and bond returns are no longer in tandem after two historic years
Annual percentage returns
Source: Morningstar as of 6/30/21. Stocks represented by S&P 500 and U.S. Bonds by the BbgBarc US Aggregate Bond Index. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index. Average returns following those 4 periods was 4.1% for bonds and 6.4% for stocks.
18th best start to a year for stocks
After the 20 best starts in history, the following 6 months saw stock returns in line with the average for all years
Source: Morningstar as of 6/30/21. U.S. stocks are represented by the S&P 500 PR Index from 3/4/57 to 6/30/21 and the IA SBBI U.S. Lrg Stock PR USD Index from 1/1/50 to 3/4/57, unmanaged indexes that are generally considered representative of the U.S. stock market during each given time period. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index.
Long term equity returns on pace with previous cycles
Source: Morningstar as of 6/30/21. U.S. stocks are represented by the S&P 500 PR Index from 3/4/57 to 6/30/21 and the IA SBBI U.S. Lrg Stock PR USD Index from 1/1/50 to 3/4/57, unmanaged indexes that are generally considered representative of the U.S. stock market during each given time period. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index.
Active and index taxable bond funds thriving
Index funds have gained in recent years, but both active and index are on pace for historic inflows in 2021
Source: Morningstar as of 6/30/21. Taxable bonds are represented by the Taxable bond fund category as defined by Morningstar. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index
Today’s inflation challenge
Unlike previous inflationary periods, interest and savings rates are not keeping up
Source: St. Louis Federal Reserve as of 6/30/21. Past performance does not guarantee or indicate future results. Index performance is for illustrative purposes only. You cannot invest directly in the index.
Disconnect between housing prices and rents
Source: Bureau of Labor Statistics and Standard and Poors, as of 5/31/21.
“Quality enhancements” can create a disconnect between expenses and inflation
Source: Bureau of Labor Statistics, as of 5/31/21. Actual example from the .U.S. Bureau of Labor Statistics website.
Source: Morningstar. Performance data quoted represents past performance and is no guarantee of future results. Current performance may be lower or higher than that shown. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of 6/30/21 and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.
Past performance is no guarantee of future results. Index performance is shown for illustrative purposes only. It is not possible to invest directly in an index. Investing involves risks, including possible loss of principal. This information should not be relied upon as research, investment advice, or a recommendation regarding any products, strategies, or any security in particular. This material is strictly for illustrative, educational, or informational purposes and is subject to change.
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