Yesterday’s close marked the 2-year anniversary of the global stock market peak. The global stock market has now gone two years without making a new all-time high and is down over 9% since November 8, 2021.

The last time the global stock market was down for two years following an all-time high was during the Great Financial Crisis (November 2007 to November 2009).

To add to the pain, the U.S. bond market (typically the buoy of portfolios) is down almost 13.5% so there hasn’t been any reprieve there either. Although, that trend should change going forward now that risk-free rates have risen to over 5% from 0% in that period (hence the pain experienced in interest-rate sensitive assets like bonds and real estate).

Additionally, real estate, as measured by the S&P 100 Real Estate index, is down 28% from November 8, 2021.

So the three major asset classes are all down concurrently since November 8, 2021 (stocks, bonds, and real estate).

Of course, the problem is magnified for real estate given the ubiquity of leverage in that sector so we’re seeing the infliction of severe pain in the commercial real estate market, specifically office. Landlords must roll over debt ($1.5 trillion over the next couple years) and refinance at much higher interest rates while vacancies are skyrocketing / rents are declining in some segments (namely office).

A few of the major, traditional asset classes that have fared well during this time frame were the U.S. Dollar, gold, very short-term fixed income, and cash.



Let’s note that although the global stock market has been down for a couple years, the U.S. economy hasn’t yet officially entered recession. Back in November 2009 the U.S. economy had already exited recession.

Furthermore, valuations of the U.S. stock market, are still extremely elevated, which implies very subdued returns over the next 10-12 years for U.S. stocks. Over the next decade I imagine there will be attractive opportunities to increase stock exposure once again, but I don’t believe we’re there yet (see commentary linked below).

Meanwhile, fixed income is providing relatively attractive returns now at yields we haven’t seen in 15-20 years. Safe short-term fixed income assets are finally providing a decent yield once again after fifteen years of essentially zero.

For investors who have weathered the storm in Treasuries, or those just entering the market, they are now being rewarded with decent interest income going forward as 0- to 10-year treasuries are yielding 4.6% to 5.4%, which you will get if you hold to maturity (regardless of temporary price movements in the interim) assuming the U.S. government doesn’t default on its debt (highly unlikely although theoretically possible).

Click image below or here Updated Bond and Stock Return Projections for PDF.










Past performance is no guarantee of future results. All investments maintain risk of loss in addition to gain.

Data from third-parties is believed to be reliable but accuracy is not guaranteed. Much of the data used to interpret the markets and forecast returns are often at odds with each other and can result in different conclusions. Many different factors impact prices including factors not mentioned here.

This is not investment advice but merely a general commentary. Individualized investment advice cannot be provided until a thorough review of your unique circumstances and financial goals is completed.

Views provided here are current only as of the moment of posting and are subject to change at any time without notification.

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