It doesn’t get much better than 2019, with the S&P 500 posted one of its highest yearly returns in two decades, up 31% for the year, and the Bloomberg Barclays US Aggregate Bond Index up 9%, its best calendar-year returns in 17 years.
Foreign markets have done well recently, particularly since the dollar started weakening in September, but they lagged US markets for the year. The MSCI Emerging Markets Index was up about 18%, and the MSCI EAFE Index of developed market stocks gained 22%.
The difference between US and foreign markets are even more stark over the trailing 10 years. For the decade, the EAFE returned about 5% annualized, emerging markets were up about 2%, while the S&P 500 soared 13%.
As long as you stayed invested, 2019 was an easy year to make money, but it didn’t always feel like it at the time.
Many investors were on edge for much of the year, worried that every pullback was a sign that the longest bull market in history would come crashing down. And yet stocks rose, despite slowing global growth slowed, an inverted yield curve inverted, which sparked recession fears, and still-unresolved trade wars.
How fund investors can start 2020 strong
The New Year is a good time to get your investments in shape. Here's a few things fund investors can do now to set themselves up for success in 2020.
- Review your investment plans and make sure that your investments are still consistent with your goals and risk needs.
- Consider rebalancing. Stocks gained more than twice as much as bonds did in 2019, so you may be overweight in stock funds; rebalancing can bring you back on track.
- Go through all of your stock and bond positions to see if you are holding funds that really should be sold or if your funds are riskier than you thought.
- Write down any changes you need to make, so you'll be more likely to follow through, even if markets change.