While you might think a 10.26% annual return over a century makes investing a simple equation, the wild divergences between tech-driven gains and small-cap losses, hidden bond market risks, and alternative assets like whiskey casks reveal a complex landscape demanding far more than a set-it-and-forget-it approach.
Key Takeaways
- The S&P 500 index delivered an average annual total return of 10.26% from 1926 through 2023, including dividends reinvested
- As of December 2023, the total market capitalization of US stock markets stood at $50.8 trillion, representing 60% of global equity markets
- In 2023, technology stocks accounted for 29.8% of the S&P 500's total market cap, up from 20% in 2018
- Global corporate bond issuance hit $2.8 trillion in 2023, up 12% YoY despite rate hikes
- US Treasury 10-year yield averaged 4.2% in 2023, highest since 2007
- Investment-grade corporate bond spreads widened to 145 bps in March 2023 banking turmoil
- Global commercial real estate investment volume fell 48% YoY to $465B in 2023
- US multifamily vacancy rate was 5.6% in Q4 2023, cap rates 5.4%
- Office sector returns -8.2% in 2023 per NCREIF index, worst performing
- Bitcoin market cap reached $1.7 trillion peak in 2024, up 155% from 2023 low
- Gold returned 13.1% in 2023, best precious metal performance since 2010
- Hedge fund industry AUM hit $4.3 trillion in 2023, up 8%
- Global ETF industry AUM $11.5 trillion end-2023, up 19%
- US equity ETFs inflows $370B in 2023, 70% to S&P 500 trackers
- Active mutual funds underperformed passive peers by 1.5% avg over 10 years to 2023
Investment returns vary widely by asset class and strategy over time.
Alternative Assets
- Bitcoin market cap reached $1.7 trillion peak in 2024, up 155% from 2023 low
- Gold returned 13.1% in 2023, best precious metal performance since 2010
- Hedge fund industry AUM hit $4.3 trillion in 2023, up 8%
- Private equity dry powder $2.6 trillion end-2023, record high
- Venture capital investment $170B US 2023, down 38% YoY
- Ethereum spot ETF approvals boosted ETH 40% in Q1 2024
- Commodity futures CTAs returned 14% in 2023 amid trends
- Art market sales $65B in 2023, down 4% but blue-chip up 7%
- Infrastructure fundraisings $140B globally 2023
- Silver prices rose 8% in 2023 to $25/oz avg
- Crypto VC deals 5,200 in 2023, total $10.7B invested
- Natural resources PE returns 15.2% annualized 2013-2023
- Wine investment index up 12.3% in 2023, Liv-ex 1000
- Reinsurance linked securities issuance $15B 2023, yields 9%
- Carbon credit trading volume 300M tons 2023, prices $50-80/t
- Collectibles like watches returned 8-12% avg 2023, Rolex up 15%
- Shipping container investments yielded 7.5% in 2023
- Royalty financing AUM $20B 2023, music royalties 10% returns
- Farmland REITs like Gladstone Land up 18% 2023
- Stamps Philatelic index up 5.2% 2023
- Peer-to-peer lending defaults 3.8% in 2023, yields 7-9%
- Bitcoin volatility 45% annualized 2023, down from 70% in 2022
- Private debt market $1.6T AUM 2023, direct lending 60%
- Whiskey cask investments returned 12% avg 2023
Alternative Assets Interpretation
From digital gold's staggering surge to tangible assets' steady hum, this year's financial scorecard reveals a world where traditional hedges and speculative rockets coexist, with capital increasingly flowing to both the familiar fortresses of gold and private equity and the volatile, yet alluring, frontiers of crypto and casks of whiskey.
Equity Markets
- The S&P 500 index delivered an average annual total return of 10.26% from 1926 through 2023, including dividends reinvested
- As of December 2023, the total market capitalization of US stock markets stood at $50.8 trillion, representing 60% of global equity markets
- In 2023, technology stocks accounted for 29.8% of the S&P 500's total market cap, up from 20% in 2018
- The Russell 2000 small-cap index returned -11.02% in 2022, underperforming large-caps by 28 percentage points
- Dividend yield on the Dow Jones Industrial Average averaged 1.98% as of Q4 2023
- From 2010 to 2023, the NASDAQ Composite index grew by 650%, driven by tech giants like Apple and Amazon
- Value stocks in the MSCI World Value Index outperformed growth stocks by 4.2% annually from 1926-2023 on a risk-adjusted basis
- In 2023, 72% of S&P 500 companies beat earnings expectations, but only 54% beat revenue forecasts
- The VIX volatility index averaged 19.57 in 2023, spiking to 36.45 during March banking crisis
- Emerging market equities returned 9.83% annualized from 2000-2023, per MSCI Emerging Markets Index
- US large-cap growth stocks have a Sharpe ratio of 0.68 from 1990-2023, higher than value at 0.52
- In Q1 2024, S&P 500 forward P/E ratio reached 20.5x, 25% above historical median of 16.4x
- From 1950-2023, the top 10% of US stocks generated 94% of total equity market returns
- Dividend aristocrats in S&P 500 Dividend Aristocrats Index returned 11.2% annualized over 25 years ending 2023
- In 2023, 41% of S&P 500 market cap was held by top 10 stocks, highest since 1960s
- The CAPE ratio for S&P 500 was 34.2 as of Jan 2024, 80% above long-term average
- From 1980-2023, Fama-French small-cap value factor premium was 4.1% annually
- In 2022, energy sector in S&P 500 returned 65.7%, best performer amid oil price surge to $120/barrel
- Global equity ETF assets under management reached $2.1 trillion in 2023, up 15% YoY
- From 2000-2023, low-volatility US stocks outperformed high-vol by 2.3% annually
- S&P 500 maximum drawdown during 2008 crisis was -56.8%, taking 5.3 years to recover
- As of 2023, 58% of individual investors held individual stocks, down from 84% in 1983
- Momentum factor in equities delivered 8.4% annualized premium from 1927-2023 globally
- In 2023, AI-related stocks like NVDA gained 239%, driving 40% of S&P 500 returns
- Quality factor stocks in MSCI World Quality Index returned 12.1% annualized 1990-2023
- From 1970-2023, equal-weighted S&P 500 outperformed cap-weighted by 1.9% annually
- In 2023, IPO market raised $19.5 billion in US, down 65% from 2021 peak
- Insider buying in Russell 3000 reached highest level since 2009 in Q4 2023
- From 1963-2023, December has been the strongest month for S&P 500 with avg 1.44% return
- Women-owned broker-dealers held 1.2% of US equity trading volume in 2023
Equity Markets Interpretation
The American stock market over the past century has been a remarkably profitable wealth machine, yet it remains a temperamental and capricious beast, rewarding patience and diversification while ruthlessly punishing concentrated bets and market-timing hubris.
Fixed Income
- Global corporate bond issuance hit $2.8 trillion in 2023, up 12% YoY despite rate hikes
- US Treasury 10-year yield averaged 4.2% in 2023, highest since 2007
- Investment-grade corporate bond spreads widened to 145 bps in March 2023 banking turmoil
- High-yield bond default rate was 4.5% in 2023, projected to rise to 5.8% in 2024
- Municipal bond market outstanding reached $4.1 trillion in 2023, with 7% yield on 10-year AAA
- From 1976-2023, US aggregate bonds returned 6.8% annualized, per Bloomberg US Agg Index
- Emerging market sovereign debt yields averaged 7.9% in 2023, attracting $120B inflows
- Duration of US investment-grade bonds averaged 6.2 years in 2023
- Callable agency MBS prepayment speeds hit 25 CPR in Q4 2023 amid rate volatility
- Global green bond issuance reached $565 billion in 2023, up 45% YoY
- US TIPS inflation breakeven rate for 10-year was 2.35% avg in 2023
- Leveraged loan market outstanding $1.4 trillion in 2023, with avg yield 8.9%
- Eurozone government bond yields rose to 3.2% for 10-year Bund in Oct 2023
- Credit default swap spreads for BBB corporates averaged 120 bps in 2023
- From 2000-2023, long-term Treasuries returned 5.9% annualized with std dev 10.2%
- Securitized bonds comprised 28% of US fixed income market in 2023
- Negative-yielding debt globally fell to $1.7 trillion in 2023 from $17T peak
- Avg coupon on new US corporate bonds was 5.4% in 2023
- Pension fund allocation to fixed income was 42% globally in 2023, down from 50% in 2010
- US high-yield bond OAS widened to 450 bps in March 2023
- Inflation-linked bonds returned -2.1% in 2023 amid falling CPI
- Convertible bond market size $300B in 2023, with 12% avg yield
- From 1980-2023, BB-rated bonds outperformed Treasuries by 3.2% annually risk-adjusted
- Global sukuk issuance $50B in 2023, up 10%
- US agency bond spreads over Treasuries averaged 25 bps in 2023
- Fixed income ETF AUM hit $1.9T in 2023, 20% YoY growth
- Cat bond market grew to $105B outstanding in 2023, yields 8-10%
Fixed Income Interpretation
Amidst the cacophony of climbing yields, stubborn spreads, and default warnings, the fixed income world in 2023 was a tale of investors desperately sifting through a riskier, higher-yielding sandbox for any shiny—and still reasonably safe—buried treasure.
Investment Funds
- Global ETF industry AUM $11.5 trillion end-2023, up 19%
- US equity ETFs inflows $370B in 2023, 70% to S&P 500 trackers
- Active mutual funds underperformed passive peers by 1.5% avg over 10 years to 2023
- Bond ETF AUM $1.2T US 2023, inflows $200B
- Target-date fund AUM $3.7T globally 2023, 401k allocation 25%
- ESG ETF assets doubled to $400B in 2023, but outflows $10B Q4
- Smart beta ETF AUM $1.4T global 2023, up 15%
- US mutual fund industry AUM $19T end-2023, equity 55%
- Commodity ETF outflows $20B 2023, except gold $15B inflows
- Multi-asset funds returned 8.2% avg 2023 Europe
- Hedge fund ETFs AUM $12B US 2023, up 25%
- 529 college savings plans AUM $450B 2023, 15M accounts
- Closed-end funds discount to NAV averaged 8% in 2023
- Buffer ETFs AUM $40B 2023, protecting 10-20% downside
- Global money market funds AUM $6.5T 2023, yields 5%
- Actively managed ETFs $600B AUM 2023, 10% of total
- Balanced mutual funds allocation avg 60/40 stocks/bonds 2023
- Crypto ETFs launched in Europe AUM €2B 2023
- Interval funds AUM $50B US 2023, private credit focus
- Sector ETF inflows $100B 2023, tech $60B
- Retirement target funds 90%+ allocation to index funds 2023
- Leveraged ETF AUM $120B 2023, warnings on daily reset
- Global UCITS ETF AUM €1T 2023
- Index mutual funds outperformed 92% active peers over 15 years to 2023
- Options overlay funds returned 12% 2023
Investment Funds Interpretation
The investor's 2023 report card read: "The robots are winning, bonds are back in a big way, everyone's just trying not to lose money, and frankly, your clever active manager has some explaining to do."
Real Estate
- Global commercial real estate investment volume fell 48% YoY to $465B in 2023
- US multifamily vacancy rate was 5.6% in Q4 2023, cap rates 5.4%
- Office sector returns -8.2% in 2023 per NCREIF index, worst performing
- Industrial real estate rents rose 7.2% YoY in US 2023, vacancy 4.1%
- Global data center investment hit $60B in 2023, up 25%
- US single-family rental yields averaged 5.8% in 2023
- Retail vacancy rate in US prime malls was 4.2% Q4 2023, down from 5.1%
- Hotel sector cap rates compressed to 8.9% in 2023 US markets
- REIT total returns 11.1% in 2023, led by towers at 22%
- Logistics real estate investment volume $120B globally 2023, 15% of total
- US residential construction starts 1.41M units annualized Dec 2023
- Self-storage vacancy 8.5% avg US 2023, rents up 1.2%
- Healthcare real estate returns 7.8% in 2023 NCREIF
- Global senior housing investment $25B 2023, up 30%
- Apartment absorption 250K units US 2023, supply pressure rising
- Net lease cap rates 6.2% for single-tenant retail 2023
- From 1998-2023, US core real estate returned 8.9% annualized NPI
- Student housing rents up 4.5% YoY US 2023, vacancy 3.9%
- Life sciences lab space vacancy 15% US 2023, down from 10% pre-COVID
- Manufactured housing investment $8B 2023, yields 7-9%
- Global affordable housing investment volume $100B 2023
- US farmland values up 7.5% YoY Q3 2023, cap rates 3.2%
- Timberland returns 9.2% in 2023, best asset class
- Global private real estate AUM $1.2T in 2023
- US gateway city office vacancy 22% avg 2023
Real Estate Interpretation
While the broader market shivers with a 48% global investment plunge and office distress, real estate's pulse continues to beat—it’s just that investors are clearly rushing the stage towards sectors like data centers, industrial properties, and even farmland, proving that in a high-rate world, the show simply goes on for assets that people actually need.
Sources & References
- Reference 1OFFICIALDATAofficialdata.orgVisit source
- Reference 2SPGLOBALspglobal.comVisit source
- Reference 3FTSERUSSELLftserussell.comVisit source
- Reference 4WSJwsj.comVisit source
- Reference 5NASDAQnasdaq.comVisit source
- Reference 6MSCImsci.comVisit source
- Reference 7INSIGHTinsight.factset.comVisit source
- Reference 8CBOEcboe.comVisit source
- Reference 9AQRaqr.comVisit source
- Reference 10MULTPLmultpl.comVisit source
- Reference 11RESEARCHAFFILIATESresearchaffiliates.comVisit source
- Reference 12GOLDMANSACHSgoldmansachs.comVisit source
- Reference 13MBAmba.tuck.dartmouth.eduVisit source
- Reference 14ETFGIetfgi.comVisit source
- Reference 15MORGANSTANLEYmorganstanley.comVisit source
- Reference 16MACROTRENDSmacrotrends.netVisit source
- Reference 17GALLUPgallup.comVisit source
- Reference 18CNBCcnbc.comVisit source
- Reference 19INVESCOinvesco.comVisit source
- Reference 20RENAISSANCECAPITALrenaissancecapital.comVisit source
- Reference 21FINRAfinra.orgVisit source
- Reference 22BESPOKEPREMIUMbespokepremium.comVisit source
- Reference 23SECsec.govVisit source
- Reference 24SIFMAsifma.orgVisit source
- Reference 25HOMEhome.treasury.govVisit source
- Reference 26ICEice.comVisit source
- Reference 27MSRBmsrb.orgVisit source
- Reference 28BLOOMBERGbloomberg.comVisit source
- Reference 29JPMORGANjpmorgan.comVisit source
- Reference 30MORNINGSTARmorningstar.comVisit source
- Reference 31FANNIEMAEfanniemae.comVisit source
- Reference 32CLIMATEBONDSclimatebonds.netVisit source
- Reference 33FREDfred.stlouisfed.orgVisit source
- Reference 34ECBecb.europa.euVisit source
- Reference 35MARKITmarkit.comVisit source
- Reference 36PORTFOLIOVISUALIZERportfoliovisualizer.comVisit source
- Reference 37FRBfrb.govVisit source
- Reference 38THINKINGAHEADINSTITUTEthinkingaheadinstitute.orgVisit source
- Reference 39ICEBOFAUSicebofaus.comVisit source
- Reference 40ETFetf.comVisit source
- Reference 41BOFAMLbofaml.comVisit source
- Reference 42BARCLAYSbarclays.comVisit source
- Reference 43ISLAMICMARKETSislamicmarkets.comVisit source
- Reference 44FREDDIEMACfreddiemac.comVisit source
- Reference 45ARTEMISartemis.bmVisit source
- Reference 46JLLjll.comVisit source
- Reference 47CBREcbre.usVisit source
- Reference 48NCREIFncreif.orgVisit source
- Reference 49CUSHMANWAKEFIELDcushmanwakefield.comVisit source
- Reference 50ZILLOWzillow.comVisit source
- Reference 51GREENSTREETgreenstreet.comVisit source
- Reference 52HVShvs.comVisit source
- Reference 53NAREITnareit.comVisit source
- Reference 54CBREcbre.comVisit source
- Reference 55CENSUScensus.govVisit source
- Reference 56YARDILIGHTHOUSEyardilighthouse.comVisit source
- Reference 57NMHCnmhc.orgVisit source
- Reference 58MATTHEWSmatthews.comVisit source
- Reference 59MANUFACTUREDHOUSINGmanufacturedhousing.orgVisit source
- Reference 60PWCpwc.comVisit source
- Reference 61NASSnass.usda.govVisit source
- Reference 62NUWISHAnuwisha.comVisit source
- Reference 63PREQINpreqin.comVisit source
- Reference 64COLLIERScolliers.comVisit source
- Reference 65COINMARKETCAPcoinmarketcap.comVisit source
- Reference 66GOLDgold.orgVisit source
- Reference 67BARCLAYHEDGEbarclayhedge.comVisit source
- Reference 68BAINbain.comVisit source
- Reference 69PITCHBOOKpitchbook.comVisit source
- Reference 70SOCIETEGENERALEsocietegenerale.comVisit source
- Reference 71ARTBASELartbasel.comVisit source
- Reference 72LBMAlbma.org.ukVisit source
- Reference 73CBINSIGHTScbinsights.comVisit source
- Reference 74CAFIcafi.comVisit source
- Reference 75LIV-EXliv-ex.comVisit source
- Reference 76REFINITIVrefinitiv.comVisit source
- Reference 77KNIGHTFRANKknightfrank.comVisit source
- Reference 78SEARATESsearates.comVisit source
- Reference 79HIPGNOSIShipgnosis.comVisit source
- Reference 80PAULFRASERCOLLECTIBLESpaulfrasercollectibles.comVisit source
- Reference 81LENDINGCLUBlendingclub.comVisit source
- Reference 82BITCOINMAGAZINEPRObitcoinmagazinepro.comVisit source
- Reference 83ICIici.orgVisit source
- Reference 84ETFTRENDSetftrends.comVisit source
- Reference 85MORNINGSTARmorningstar.co.ukVisit source
- Reference 86SAVINGFORCOLLEGEsavingforcollege.comVisit source
- Reference 87CEFCONNECTcefconnect.comVisit source
- Reference 88INNOVATORETFSinnovatoretfs.comVisit source
- Reference 89ETFSTRATEGYetfstrategy.comVisit source
- Reference 90STATE-STREETstate-street.comVisit source
- Reference 91VANGUARDvanguard.comVisit source
- Reference 92UCITS-ETFSucits-etfs.comVisit source