Great year for most stock markets in 2013–not so good for bonds as interest rates rose. So far, 2014 has not started off well for stock markets, in particular, the international market. I always like to look to see how investment returns vary from one time period to another. As you can see in this chart, the stock market was due for a little correction given last year’s stellar returns and bonds have made back about half of what was lost last year. So we can never decide to eliminate one asset class all together from portfolios–we need to have these various assets that are acting differently, depending on what the market is doing. All data is from Morningstar Advisors.
| Returns as of 1/29/14 | Total Ret MTD | Annual Return 2013 |
| S&P SmallCap 600 Index | 4.44 | 41.31 |
| S&P MidCap 400 Index | 3.05 | 33.50 |
| Vanguard Total Stock Mkt Index Fund | 3.66 | 33.35 |
| S&P 500 Index | 3.92 | 32.39 |
| MSCI EAFE (international stock) | 3.57 | 19.43 |
| Vanguard Total Intl Stock Index Fund | 4.12 | 15.04 |
| Barclays US Corporate High Yield Index | 0.67 | 7.44 |
| Barclays US Interm Credit Index | 1.09 | 0.17 |
| Barclays US Agg Bond Index | 1.45 | 2.02 |
| Vanguard Total Bond Market Index Fund | 1.43 | 2.26 |
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