Our Insights

About personal finance, investments and markets.
March 20, 2014

What we have learned in the last 5 years since the Crash

It may seem like only yesterday, but the low of the financial crisis happened 5 years ago, exactly on March 9th 2009. What lessons can we draw from that painful time? The biggest mistake an investor could have made was to throw away a long-term financial plan in order to sell in panic those assets that have underperformed in the previous 5 years leading up to March 2009 while buying assets that have outperformed.

The following table shows the major asset classes and how they have performed up to March 2009.

Asset classs5y performance up to 09.03.2009
Managed Futures+27%
Hedge Funds+20%
Bonds+15%
Global equities-20%
Commodities-27%
US equities-41%
US real estate (REITS)-58%

The next table shows how the same asset classes have performed since then. The two tables are almost an exact inversion of each other! It just reminds us how asset performance can change from one 5y period to another.

Asset classs5y performance after 09.03.2009
US real estate (REITS)+204%
US equities+175%
Global equities+80%
Hedge Funds+51%
Bonds+25%
Commodities+23%
Managed Futures-4%

Remember: never chase past performance!

For further questions, please contact us at info@ipanema-capital.com

Sources:
Managed Futures = Newedge CTA Index
Bonds = S&P/CitiGroup International Treasury Bond Index
Hedge Funds= Dow Jones Credit Suisse
Commodities = UBS Commodity Index
US Property = iShares DJ Real Estate ETF
World equities = MSCI ACWI ex US Index
US equities = S&P 500 ETF

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