CapitalTime
Articles on investing and capital management, with a quantitative focus.
Zoom Out to 1 Year
2020-03-22
Lately, daily volatility in markets has been extreme. To see things more clearly, I think it helps to "zoom out" and look at a longer period such as the trailing 1 year.
This table shows the constituents of #prp and total returns (including dividends) on a CAD basis, according to Stockcharts:
| Asset / ETF | 1 Year |
|---|---|
| XIU (TSX 60 stock index) | -22.64% |
| ZSP (S&P 500 index) | -9.87% |
| XBB (broad bonds) | +0.64% |
| MNT (gold bullion) | +21.74% |
Stocks: While Canada's TSX index is down very sharply over 1 year, the S&P 500 index (in CAD terms) is only down mildly. The US Dollar has increased versus CAD, which dampens the decline in the S&P 500.
Bonds: The one year return is about flat, despite rather extreme bond volatility over the last month.
Gold: Up significantly over the last year.
Where does this leave us?
The recent stock market crash has been horrifying to watch. However, if you "zoom out" a bit and look at the last year, the numbers don't look as horrifying — especially if one diversifies beyond just stocks.
— Jem Berkes