These are frightening and unusual times. Economies, financial markets, and people around the world are gripped with coronavirus fears. We’ve gone from a buoyant economy that was supported by a very healthy consumer to a full-blown crisis. The S&P 500® Index declined 19.6% in the first quarter and experienced the fastest move into bear market territory in history. The Russell 2000® Index declined 30.6% and the Dow Jones Industrial Average had its worst first quarter ever. The market’s swoon has been nauseating and very few stocks have been defensive.

2019 was an extraordinary year for equity investors. The S&P 500® Index surged a whopping 31.5% while the Russell 2000® Index advanced 30.6%. For the fourth quarter, the S&P 500 and Russell 2000 gained 9.1% and 7.1%, respectively. Such impressive performance represented a sharp turnaround from year-end 2018, when markets retreated alongside fears of tighter monetary policy and slowing growth.

Equity investors experienced a wild ride in the third quarter. After a solid start in July, we witnessed a sharp swoon in August as trade tensions again took center stage. The S&P 500^® Index posted declines of nearly 3% on August 5^th and August 14^th as volatility surged. Fortunately, the damage was mitigated by a late August rally followed by a decent September. In the end, the S&P 500 Index finished the quarter up 1.7% while the Russell 2000^® Index was down 2.4%. Year-to-date, the S&P 500 Index and Russell 2000 Index finished the period up 20.1% and 14.2%, respectively. 

Stocks continued their hot streak in the second quarter. The S&P 500 Index advanced 4.3% while the Russell 2000 Index gained 2.1%. Year-to-date, the S&P 500 Index and the Russell 2000 Index have posted total returns of 18.5% and 17.0%, respectively. Interestingly, the S&P 500 Index had its best first half of a year since 1997.

Equities surged higher to start 2019. The S&P 500 Index gained 13.7% while the Russell 2000 Index was up 14.6%. Of note, this was the best quarter for the S&P 500 Index since 2009 and the best first quarter since 1998. Clearly, this advance represented a dramatic turn of events from Q4 2018, when stocks declined and the S&P 500 Index experienced its worst December since 1931.

2018 brought investors a number of twists and turns. In the end, the S&P 500 Index finished the year down 4.4%. This was the first down year for the S&P since the sharp swoon we experienced in 2008. Losses were concentrated in the fourth quarter, when the Index dropped 13.5% and experienced its worst December since 1931. Meanwhile, the Russell 2000 Index declined 20.2% in the fourth quarter and ended the year down 11.0% as a “risk off” mindset disproportionately impacted shares of smaller companies.

Equity markets enjoyed surprisingly strong returns in the third quarter. The S&P 500 Index gained 7.7% and posted its best quarter in nearly five years. Year-to-date the S&P 500 Index finished the quarter up 10.6%. On another bullish note, the Nasdaq Composite Index gained 7.4% and was up for the ninth consecutive quarter.

Equity markets picked up steam in the second quarter. Volatility cooled following a first quarter spike and investors were generally encouraged by economic data and corporate earnings reports. The S&P 500 Index gained 3.4% while the small cap-oriented Russell 2000 Index advanced an impressive 7.8%. Year-to-date, the S&P and Russell finished the quarter up 2.7% and 7.7%, respectively.