A decade ago, the financial hub of the U.S. was attacked, changing lives forever. Looking back, the financial picture has also been altered, and as an investor, it is informative to see how the market has fared over the past 10 years, Sam Stovall, Chief Investment Strategist at S&P Equity Research, points out.
In September 2011, the U.S. accounted for 28% of the global economy and today, the U.S. represents 25%, according to Stovall. The obvious economic indicators are weaker today than back in 2001: housing starts, auto sales and consumer confidence are all much lower in 2011.
Many asset prices are higher in 2011, due to the new economic environment. Stovall points to WTI oil, at $27 per barrel in 2001 and today, $88 per barrel. Gold was trading at $273 an ounce in August 2001, compared to $1,845 seen today. The U.S. dollar index is down 40 points lower than in 2001. [Risk and Your ETF Portfolio: How to Protect It]
What is striking is that within the decade, despite the economic differences, the S&P 500, measured on a sector level basis, shows positive returns in nine of the 10 sectors. Financials recorded the only decline of -4.3%, according to Stovall’s research. [S&P 500 ETFs Survive Tests of 200-Day Average]
The lesson learned is investors should stay the course in the stock market, according to their investment strategy, and not pull out in a panic. A long term investment strategy, such as following the 200 day-moving-average, can help limit risk. [Sell ETFs in May and Go Away?]
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.