The following chart depicts asset class performance (based on major indices) for Q408. As expected, returns for the final quarter are quite dismal, even following a year-end rally in most markets in December. The following is of particular interest:
- Investment grade bonds recovered following the October decline ending up 5% for the quarter
- Commodities (on the aggregate), which had a stellar H108 and then plummeted, ended up for Q408
- TIPS returned a -3% during Q408 as deflation expectations weighed on investment decisions
- High Yield (as noted in a previous post) saw yield blown wide open, depressing prices considerably for the quarter and presenting attractive investment opportunities toward the second half of December
- Equity markets saw their worst quarter in 20 years, with emerging market's taking the biggest hit as risk aversion dominated the period
- Real estate, which lead the economic decline still rippling through the global economy, was down another 37% in Q4. It should fall further!
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