Articles on investing and capital management, with a quantitative focus.

#bigpicture - Big picture thoughts

Zoom Out to 1 Year


Lately, daily volatility in markets has been extreme. To see things more clearly, I think it helps to "zoom out" and look at a longer period such as the trailing 1 year.

This table shows the constituents of #prp and total returns (including dividends) on a CAD basis, according to Stockcharts:

Asset / ETF 1 Year
XIU (TSX 60 stock index) -22.64%
ZSP (S&P 500 index) -9.87%
XBB (broad bonds) +0.64%
MNT (gold bullion) +21.74%

Stocks: While Canada's TSX index is down very sharply over 1 year, the S&P 500 index (in CAD terms) is only down mildly. The US Dollar has increased versus CAD, which dampens the decline in the S&P 500.

Bonds: The one year return is about flat, despite rather extreme bond volatility over the last month.

Gold: Up significantly over the last year.

Where does this leave us?

The recent stock market crash has been horrifying to watch. However, if you "zoom out" a bit and look at the last year, the numbers don't look as horrifying — especially if one diversifies beyond just stocks.

Jem Berkes