So if I asked you how the market performed this year, what would you say? Positive? Negative? How much?
With two weeks left to the year, the S&P 500 returned 1.01% on a total return basis so far. With all the volatility this year from two corrections, I would not be shocked if anyone thought it was worse.
If the year ends positive, the S&P 500 will have ten straight years without a loss. It’d be a first.
Nine-year streaks have happened twice since 1926 — the current streak from 2009 to 2017 and the nine-year period from 1991 to 1999. A ten-year positive streak is not normal by historical standards. Neither is nine years for that matter.
That, however, does not mean the S&P has to go negative in the next two weeks or even next year. Eventually, it will. The risk is repeating history and believing its a new normal.
That said, the S&P 500 might be the only (dim) bright spot for 2018. Down best describes everything else.
A quick look at global index returns shows U.S. small caps, U.S. mid caps, and most global stock markets are in the red this year. Most bond returns look red too. So it’s a safe bet cash – the 2% yield on my savings account looks great by comparison — outperforms most asset classes this year.
I’ll have more on this in January when I update the asset tables after the final numbers are in.
Lastly, tax loss harvesting might be worthwhile these last two weeks. Just make sure you know what you’re doing first — here’s a cost basis guide to brush up on if needed.
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Now for the yearly blog review and what lies ahead.
This blog has been a perpetual work in progress — never finished, nor perfect — since I started it back in 2010.
Part of that work in progress came about a year ago in the form of the Library. The gist is simple. It reinforces my habit of reading and anyone who wants to follow along with what I read (at least, the better stuff), can sign up and do so.
The reading part was a goal from a few years ago. Turns out, I’m phenomenal at finding and collecting things to read (well over 5,000 files last I checked) but terrible at making the time to read it. So I set out to read more, a little each week, and the Library adds extra motivation.
Anytime I read something good, it ends up in the Library. Some of it gets discussed in posts, a lot of it doesn’t.
To date, 246 files have been added, from research papers to a few old books, but mostly stuff from great investors — written articles, letters, interviews, and speeches (even things I transcribed myself).
Graham, Buffett, Munger, Marks, Klarman, Ellis, Singleton, Thorp, Greenblatt, Keynes, Templeton, Bernstein, Lynch, Carret, and Schloss, along with a few others are in there, with more to come. For example, 33 of Ben Graham’s earliest articles — which I dug up back in August — are in there.
Despite my lack of promotion for the Library, 627 people signed up in some form this year, which is 600 more than I expected. I appreciate it! It’s added motivation to keep chugging along. If you’re interested, check it out.
For 2019, I’ll be doubling down on reinforcing habits, but with book notes. No surprise, books that sink in most, happen to be the ones I go through a second time to summarize and write notes on. I’m just terribly inconsistent with it, which needs to improve.
I spent the past month editing old notes and will spend the next two weeks doing the same. It’s a start. Maybe it will be useful to others, maybe not, but, hopefully, it reinforces the habit of doing it consistently. That’s the only new change for next year. Everything else will continue like years past.
Finally, this is the last post for 2018!
Have a Happy Holidays and a prosperous New Year!
Last Call
- Why Small Habits Make a Big Difference – Farnam Street
- Messy Desk and Benign Neglect All Ideas to Grow – T. Harford
- Rational vs. Reasonable – M. Housel
- What do Rocket Scientists, Cab Drivers, and Football Players Have in Common? – O. Varol
- The Housing Boom is Already Gigantic. How Long Can It Last? – R. Shiller
- What You Can Learn From How Warren Buffett’s Investment Process Evolved – Forbes
- The Trances of History – J. Catherwood
- The State of Technology at the End of 2018 – Stratechery
- 105 Experts On What Scares and Inspires Them Most About the Future – Motherboard
- Top 10 TED Talks of 2018 – TED
