Substantial gains across asset classes in 2012 confirmed the old adage about the market ascending a wall of worry, as investor anxieties over the presidential election and a year-end fiscal cliffhanger did not prevent share prices from rising quite sharply.
In its first equity research report of the new year, S&P Capital IQ tallied market performance for 2012, while also offering a warning about 2013 based on current events.
The high double-digits was the main range for asset prices last year, according to Sam Stovall (left), S&P’s chief equity strategist and author of the research report. S&P’s main 500 index of large-cap stocks returned 16%, its mid-cap index, 17.9%, and its small-cap index, 16.3%, in 2012.
Foreign markets did even better, with the benchmark MSCI-EAFE index, which tracks developed overseas markets, returning 17.9% and MSCI’s emerging markets index returning 18.6%.
The strongest asset class, though, was real estate investment trusts, with the NAREIT equity-only index rewarding investors with a 19.7% return.
Notably, all six of these key benchmarks significantly outpaced their average historical return since 1977.
Just two principal asset classes lagged their 35-year averages, but even they were in positive territory. The S&P GSCI, a commodities index, returned a measly 0.1% and Barclay’s Aggregate bond index was up 4.5%, a tepid performance in a bond bull market that has lasted decades.