2018 was a disappointing year for investors not just because the S&P 500 declined for the first time since 2008 but because many other financial markets fell as well, often far more than the preeminent U.S. large-cap index.
Here’s a quick recap of the total returns of multiple markets in 2018, courtesy of S&P Dow Jones Indices.
Please note that these returns include dividend payments, which is why S&P Dow Jones is reporting that the S&P 500 lost 4.5% in 2018 rather than the 6.2% that’s been widely reported but excludes dividends.
- S&P MidCap 400 and SmallCap 600 indexes suffered even larger losses, of 11.1% and 8.5%, respectively.
- International stock indexes, including emerging market stocks, which are often cited as a promising diversification from U.S. stocks, fared even worse. The S&P Emerging Broad Market Index (BMI) finished 2018 down 13.5% and the S&P Developed BMI excluding the U.S. plummeted 14.4%.
- Several commodities markets posted even larger losses. The S&P GSCI Energy Index, formerly known as the Goldman Sachs Commodity Index, ended 2018 down 17.1% while the S&P GSCI Industrial Metals fell 18%. Plunging oil prices and trade tensions underpinned these losses. The S&P GSCI Precious Metals Index fell just 3.6%.
S&P Dow Jones cites escalating U.S. trade tensions with China, a flattening yield curve and uncertainty about future interest rate hikes by the Federal Reserve for the disappointing year in U.S. equities.
Within U.S. equities, only the defensive sectors of health care and utilities finished decidedly higher, ending 2018 with gains of 6.5% and 4.1%, respectively. Growth sectors such as consumer discretionary ended with a 0.8% gain while technology finished down 0.29%.