How much can you make in stocks? Realistic Expectations (ICMA Retirement Corporation)

Charts of the Week

Capital Markets Review (As of 9/30/2015)

Chart of the Week for October 2, 2015 - October 8, 2015

Capital market returns were generally negative in the third quarter of 2015, with the exception of U.S. Bonds which had slightly positive returns as U.S interest rates fell during the quarter. Over the trailing 1-year period, U.S. Bonds and U.S. Small-Cap Stocks provided positive returns while International Developed Market Stocks, Emerging Market Stocks, U.S Large-Cap Stocks, and U.S. High Yield Bonds all had negative returns. Over the trailing 5-year period, all asset classes shown except Emerging Market Stocks had positive returns, with U.S. Large- and Small-Cap Stocks outperforming the other asset classes shown.

While U.S. economic reports were generally positive for the third quarter, the negative returns for the asset classes shown above can be related to several factors including market volatility, concerns over economic conditions in China, and U.S. interest rate policy. Emerging Market Stocks was the worst performer in U.S. dollar terms, losing 17.90%. U.S. Small-Cap Stocks lost 11.92%, International Developed Market Stocks lost 10.23%, U.S. Large-Cap Stocks lost 6.44%, and U.S. High Yield Bonds lost 4.86%. U.S. Bonds was the only asset class with positive returns noted on the chart for the quarter, wtih a return of 1.23%.

In the chart above:

• U.S. Bonds are represented by the Barclays U.S. Aggregate Bond Index.
• U.S. High Yield Bonds are represented by the Barclays U.S. Corporate High Yield Index.
• U.S. Large-Cap Stocks are represented by the S&P 500 Index.
• U.S. Small-Cap Stocks are represented by the Russell 2000 Index.
• International Developed Market Stocks are represented by the MSCI EAFE (Net) Index.
• Emerging Market Stocks are represented by the MSCI Emerging Markets (Net) Index.