US stocks won the last decade - February 20, 2019

US stocks won the last decade

US-based stocks beat every other instrument in the last 10 years. Small, medium and large cap shares performed especially good: they had a return between 13-15% in the last decade. Commodities and international stocks on the other hand were not so lucky. See all the performance numbers in one chart!

Shares, especially US-based stocks outperformed all other assets in the last 10 years, that’s the main takeaway from the updated chart made by A Wealth of Common Sense. The blog creates the same chart every year, comparing the returns of different asset types.

US stocks were the king

According to the article, we can see that the performance of U.S. stocks was really consistent during this period. The article points out that “Even after the sub-par 2018 campaign, the 10 year returns for U.S. stocks are spectacular. Small caps, mid caps, large caps, and REITs have all seen solid double-digit annual returns since the start of 2009.”


Click on the image to see it in full resolution

The easiest way to “navigate” the chart above is through the color codes of the assets. With this, we can see that large cap stocks usually performed in the top, never worse than the 5th place. Small and medium capitalization stocks also performed rather well.

The bottom performers

International stocks on the other hand did not do that good. As the article puts it: “Not only did U.S. stocks crush the rest of the world, but bonds and even cash outperformed international stocks since 2008.”  Although the latter sentence is based on an 11-year time span, it still shows how great US stocks performed.

The other great loser of the last decade was commodity. Ever since 2009 they are down to a combined 40%. If we factor in 2008 to have a 11-year time span, we can see an enormous 62% fall in the asset.

What to expect?

As the article points out, “commodities tend to live in an enormous boom/bust cycle” so a rise in the future can be expected. We also underlined several times that oil might have a bright future, and it may gain some momentum soon, although there are several variables that can influence this.

After last year’s problems, stocks this year may have a great time. We wrote about this several times already (e.g. S&P 500 had its best January since 1987, 2019 may be the year of investments) and our general prognosis remains the same. But the aforementioned article has a very interesting point to make: even if American stocks perform close to zero in the next 5 years, their 15-year annualized returns would still be between 7.9-9.7%. “Those are pretty great returns in a scenario where a market goes nowhere for one-third of the entire period”, points out the article.

Disclaimer: This analysis is for general information and is not a recommendation to sell or buy any instrument. Since every investment holds some risk, our main business policy is based on diversification to minimize threats and maximize profits. Innovative Securities’ Profit Max has a diversified portfolio, which contains liquid instruments. This way, our clients can maintain liquidity, while achieving their personal investment goals on the long term.