Relative Performance of Asset Categories

These charts show the relative price performance of twenty selected asset categories versus the S&P 500 index (SPY) on a monthly basis over the past three years. They may help create or maintain perspective as markets fluctuate so violently today.

Future markets may be shifted into new relationships for some time due to the current malaise and government responses to the problems, but it is not possible think usefully about a shifting relationship, unless you first have a clear idea of the base from which the shift may take place. These charts may help somewhat with clarifying the base.

Charts are courtesy of www.StockCharts.com.

In each chart, the black line is for the S&P 500, represented by the exchange traded fund SPY. The red line is the relative performance line versus the S&P 500 for the subject asset category, represented in some cases by an index and in other cases by a proxy fund.

The right scale is the SPY price. The left scale is not particularly interesting for our purposes here. It is the price of the subject index or fund divided by the price of SPY. It should be ignored in the context of this article.

The important fact is that a rising red line indicates the subject index or fund outperforming the S&P 500, while a declining red line indicates the subject index for fund underperforming the S&P 500.

10-Year Treasury Bond
(nearest proxies IEF or TLH)

Lehman Aggregate US Bonds
(proxies AGG, BND and VBMFX)

Long-Term Investment Grade US Corporate Bonds
(proxy LQD and VWETX)

Below Investment Grade (Junk) US Corporate Bonds
(proxy HYG and VWEAX)

Intermediate-Term Tax Exempt Municipal Bonds
(proxy VWIUX)

Non-US Developed Stock Markets
(proxy EFA and VEA)

Japan
(proxy EWJ)

Germany
(proxy EWG)

Canada
(proxy EWC)

Singapore
(proxy EWS)

Emerging Stocks Markets
(proxy EEM and VWO)

China
(proxy FXI)

India
(proxy INP)

Brazil
(proxy EWZ)

Russia
(proxy RSX)

Turkey
(proxy TUR)

US Equity REITs
(proxies VNQ, RWR, IYR)

DJ-AIG Commodity Index
(proxy DJP)

Gold Bullion
(proxy GLD)

West Texas Intermediate Crude Oil
(poor proxy USO — contango and backwardation)

US Dollar Index
(proxy UUP)

Comments

[granger:]

I always love your posts. Thank you for your time and efforts

2008 Dec 07 10:53 AM

[QVM Group:]

thank you granger -- very kind of you

2008 Dec 07 11:41 AM

[SeekingTruth:]

A most refreshing chart presentation, a lot of information succinctly presented and always valuable to me.

2008 Dec 07 12:15 PM

[bananatrader:]

Non-correlation with SPY is fascinating. Creative thinking pays off!

2008 Dec 07 09:45 PM

[oldman:]

close to the time there will be a reversal? Stocks will outperform bonds.

2008 Dec 08 09:18 PM