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HERE ARE THE LATEST trends in the world of investing:

  • The S&P 500 slumped 20% in 2020’s first quarter, after soaring 28.9% in 2019. These figures don’t include dividends. Since the market bottomed on March 9, 2009, the shares in the S&P 500 have climbed 282%, though they remain just 69% above their March 24, 2000, peak—a tiny gain over a turbulent 20-year stretch.
  • While almost all stocks posted losses in 2020’s first quarter, the pattern resembled that seen in recent years: U.S. growth stocks fared better value shares, while large-company shares held up better than smaller-cap stocks. Similarly, both developed foreign markets and emerging markets once again lagged behind U.S. shares.
  • Treasury bond prices rose and yields fell sharply in 2020, with the benchmark 10-year Treasury note yielding 0.66% on March 31, down from 1.92% three months earlier. In early March 2020, the 10-year yield hit a record low of 0.54%.
  • The Federal Reserve slashed short-term interest in 2020’s first three months, as it sought to prop up the slumping economy. One consequence: One-year Treasury bills were yielding just 0.04% as of March 31.
  • Real assets had mixed performance during 2020’s first three months. Oil prices plummeted to $20 a barrel, down from $61 at year-end 2019. Real estate investment trusts also tumbled, falling along with the rest of the stock market. But gold, which stood at $1,520 at year-end 2019, climbed to $1,591.
  • In December 2019, the Federal Reserve projected that the U.S. economy will expand 2% in 2020, with unemployment at 3.5% and core inflation running at 1.9%. Expect those numbers to be substantially revised.
  • As of 2016, 51.9% of U.S. families were invested in the stock market, up from 48.8% three years earlier, but below the 53.2% peak recorded in 2007, according to the Federal Reserve’s Survey of Consumer Finances. The survey is conducted every three years.
  • There’s been much handwringing over whether index funds are coming to dominate the U.S. stock market. But according to the Investment Company Institute, index mutual funds and exchange-traded index funds hold just 13% of U.S. stocks, versus 15% for actively managed funds and 71% for others, including individuals, hedge funds, pension funds and insurers.

Want to get a handle on stock and bond market valuations? Check out the chapter on financial markets.

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