trending Market Intelligence /marketintelligence/en/news-insights/trending/QwtCKWvJ7Rq-8UHhasShtQ2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Equities, real estate won big in the decade of 'risk-on'

Street Talk - Ep. 64: Coronavirus jumpstarts digital adoption

Street Talk Podcast

Street Talk - Ep. 63: Deal talks continue amid bank M&A freeze, setting up for strong Q4

Street Talk Podcast

Street Talk - Ep. 62: 'Brutal' outlook for oil demand offers banks in oil patch no relief

Amid Q1 APAC Fintech Funding Slump, Payment Companies Drove Investments

Equities, real estate won big in the decade of 'risk-on'

Equities and real estate were the big winners in a decade characterized by cheap money and fiscal expansion, as risk-seeking investors in U.S. assets were rewarded with strong returns.

The "teens" were an era of ultra-loose monetary policy, with the Federal Reserve's target rate spending the majority of the decade close to zero, and rising no higher than 2.5%, while the central bank's quantitative easing program swelled its balance sheet to as much as $4.5 trillion in 2015, juicing credit markets.

The result was to encourage risk and, as a result, of the four asset classes tracked here by S&P Global Market Intelligence (equities, real estate, bonds and commodities) the S&P 500 performed best.

"The bottom line was, if you were in it, you did well," said Howard Silverblatt, a senior index analyst at S&P Dow Jones.

SNL Image

Cheap money and a free-spending consumer sector have supported the longest-ever bull run in U.S. equities, on track to reach 11 years in early March. The S&P 500 index gained 190% in the decade, a considerably better performance than in the first 10 years of the century when the 2008 financial crisis left it 24% lower in the period. It could not beat the 1990s, however, when the index surged 315.7%.

The Dow Jones U.S. Real Estate Index was largely performing in line with equities until mid-2016, but tailed off as the Fed started to raise rates.

Both assets took a hit at the height of the Fed's hiking cycle in December 2018, with the prospect of further rate rises knocking as much as 12.9% off the Dow Jones Real Estate Index and 15.7% off the S&P 500, before the Fed reversed course and they began to recover later in the month. As rates fell back to 1.5%-1.75%, real estate almost matched the S&P 500, gaining 24.1% in 2019 as opposed to the 28.9% gain in equities.

Not-so-super cycle

Commodities ended the decade strongly in 2019, with the best annual return in 2019 since the pre-crash commodity boom as sanctions to Iran and Venezuela boosted the price of oil. But across the decade, the S&P GCSI index was down 16.75%, having slumped by as much as 54.45% in February 2016 as slower economic growth in China weighed on global demand.

The rapid economic growth of China in the late 2000s resulted in a commodity boom as massive investment in infrastructure sucked in global resources. But as the world's second-largest economy slowed its pace and sought to transition away from this investment-led approach, demand dried up.

Quantitative easing in the U.S., Japan and Europe has also limited returns from the bond markets, with investors forced into lower-rated debt in a hunt for yield. The Bloomberg Barclays U.S. Aggregate Bond Index gained just 8.8% over the course of the decade.

Yet there remains demand for bonds heading into the new decade. Axa Investment noted in its end-of-year report that "bonds look expensive" with credit spreads near historic lows. However, corporate defaults are not expected to be a concern "at least in the first half of 2020" which makes high-yield credit attractive.

The prospect of further easing by the Fed is another signal for investors to move into bonds, with spreads to Treasurys likely to widen.

"The bar for further easing from the Fed keeps getting lower. [U.S. credit] is a good defensive posture to hold in portfolios," said Scott Mather, chief investment officer for U.S. core strategies at Pacific Investment Management Co., in a webcast.