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Research has proven time and again that it is impossible to consistently time the financial markets, by exiting before trouble arises and re-entering just before the “all clear” signal. Nevertheless, we believe it is important to stay abreast (if you like) of recent market history because understanding shorter term market movements, can give you the confidence to stick with your long term investment plan.
The following chart shows the movement of the MSCI All Country World Index (an index that measures stock performance globally) over the course of the last twelve months. You will note that there are also a number of the major news headlines that may have impacted stock performance.
Domestic Stock Performance
Domestic Stock Index Data: Large Cap (S&P 500 Index), Large Cap Value (Russell 1000 Value Index), Large Cap Growth (Russell 1000 Growth Index), Small Cap (Russell 2000 Index), Small Cap Value (Russell 2000 Value Index), and Small Cap Growth (Russell 2000 Growth Index)
International Stock Performance
In US dollar terms, developed markets outside the US outperformed the US equity market but underperformed emerging markets indices during the quarter. Stocks of small capitalization companies outperformed their large capitalization counterparts in non-US developed markets.
Fixed Income (Bond) Performance
Although still painfully low, interest rates across the US fixed income markets generally increased in the third quarter. The yield on the 5-year Treasury note rose 13 basis points (bps) to 1.14%. The yield on the 10-year Treasury note rose 11 bps to 1.60%. The 30-year Treasury bond increased 2 bps to finish with a yield of 2.32%.
The 1-year Treasury bill yield rose 14 basis points to 0.59%, and the 2-year Treasury note yield increased 19 basis points to 0.77%. The yield on the 3-month Treasury bill rose slightly by only 3 basis points to 0.29%, while the 6-month Treasury bill was up 9 basis points to 0.45%. Below is a summary of the fixed income market.