Last year was unremarkable for the global markets, similar to what was seen in 2011. The S&P 500 closed at nearly 0.75% less than where it started at the beginning of 2015 (+1.38% total return including dividends). Overall the global market struggled, but there were a few sectors who finished positively. These included Health Care, Technology, and Consumer Discretionary sectors. The worst performing sectors included Financial, Utility, and Material sectors. And the biggest loss was seen in the Energy sector, which finished at negative 23%, as oil prices per barrel decreased to the low $30’s.
As seen similarly in 2011, an extremely erratic market plagued investors in 2015. Because of these market patterns, diversified investment practices and value buys did not place investors in positive territory in 2015. Sloy, Dahl & Holst believes that many of these investments have yet to play out. Again, drawing similarities from Q3 and Q4 of 2011, investors who were patient were rewarded in the end.
Below are the year-end returns for 5 major indexes;
BarCap US Agg Bond + 0.55%
S&P 500 + 1.38%
Russell 2000 - 4.41%
MSCI EAFE (Europe) - 0.81%
MSCI EM (Emerging Markets) - 14.92%
Again, continued patience going into 2016 is essential to a successful year. There are recognizable opportunities within Financials, Technology, Energy, Health, Europe and the Emerging Markets that we are keeping an eye on. Though instant gratification is often sought when investing, it is important to keep in mind that the best investment opportunities rarely come to fruition immediately.
While it trailed other major global indices halfway through 2015, The S&P 500 regained its place at the top once volatility in China picked it up again. Sloy, Dahl & Holst will continue to have the majority of our equity positions within the USA. Nonetheless, in the coming years we will be looking for new leadership from international markets. Do not forget – the S&P 500 was negative for a decade from 2000 to 2010. Global diversification will be critical over the long term.
As always, we are here for you if you have any questions or concerns.
- Sloy, Dahl & Holst, Incorporated.