It seems like only yesterday we had 700 point down moves in the Dow, Lehman going bankrupt, and billions and billions in bailouts being handed out as the stock market made new lows seemingly every week, dragging down most commodity markets with it.
But can you believe it's actually been 5 years, with the low of the crisis happening 5 years ago yesterday - March 9, 2009. The first 3 years sure went by quickly… as we didn't really know we were in the clear, and now the last two have been a blur of new highs in the stock market seemingly every week. My how things change in a hurry.
Now, that was the low in the U.S. stock market - other markets like Crude Oil bottomed before then, and some like Wheat bottom after that - but it's hard to find many losers among the basket of markets we track since that fateful day 5 years ago. Everything on our list is up since then besides the U.S. Dollar and Japanese Yen (imagine that, the two economies which went nuclear in terms of providing capital to the markets).
Some items of note include Copper outpacing Gold almost 2 to 1… (funny we don't recall any stories about Copper vending machines over the past 5 year); Cotton surging over 140%, and Crude Oil-- the only other market not a stock index-- having more than doubled with gains of 124% (of course that would have been tough to realize with the cost of carry and negative roll yield.)
(Source: All data markets above are cash data provided from CSI.)
Meanwhile, Bonds have managed to stay positive despite 5 years of predictions of rising rates and debt ceiling debates; while Natural Gas somehow managed to get into the black after spending most of the 5 year period worse than the March 9th, 2009 low. And most impressive of all, of course, is U.S. stocks, where the S&P has even become a bit of a third wheel despite more than doubling, because of the high flying Nasdaq and Russell 2000 which are both better by more than 225%. Wow - why didn't Bernanke just come out and tell Americans to buy stocks, on margin, on March 9th - and guarantee against any losses…
The question is - which markets will be the top performers over the next five years. Will we see a five year replay of the start of 2014, where last year's laggards are this year's stars (so far), or will history repeat itself in one of the greatest bull market continuations of all time (not sure we can count on that… unless Bernanke wants to come out of retirement and make that guarantee). To remind us just how things can change from one 5 year period to the next, we decided to use March 9th, 2009 as a marker and look at the 5 year returns of the main asset classes both leading up to that point, and since that point. You can see a tale of two five year periods, with the two Asset Class scoreboards almost an exact inversion of one another.
Sources: Managed Futures = Newedge CTA Index,
Bonds = S&P/CitiGroup International Treasury Bond Ex-U.S. Index
Hedge Funds= Dow Jones Credit Suisse
Commodities = UBS Commodity Index (NYSEARCA:DJCI) Real Estate = iShares DJ Real Estate ETF (NYSEARCA:IYR);
World Stocks = MSCI ACWI ex U.S. Index (NASDAQ:ACWX), U.S. Stocks = SPDR S&P 500 ETF (NYSEARCA:SPY)
Disclaimer: Past performance is not necessarily indicative of future results