Some investors may view gold as a risk-management asset. While returns for gold have been too volatile for it to serve as an effective safe haven or inflation hedge, some may see it as an asset to weather an economic downturn. But there’s not much evidence gold can fulfill this purpose.
Many people start out managing their own investments. But as their earnings and assets grow, their financial needs and challenges become more complex—and continuing to go it alone could prove costly in terms of investing miscues. Consider three common mistakes that can reduce returns and increase anxiety.
This report features world capital market performance and a timeline of events for the past quarter. It features a global overview and the returns of stock and bond asset classes in the US and international markets. The report also illustrates the impact of globally diversified portfolios.
For many investors, it’s hard not to follow the daily fluctuations of the stock market. But day-to-day volatility is a reminder that stocks are best considered a long-term investment.
Part of the reason stocks have higher expected returns than bonds is uncertainty over shorter horizons. For example, the S&P 500 Index return was negative in about 24% of overlapping one-year periods from January 1926 through March 2025. The worst outcome over these one-year periods was about –68%, dropping $1 in invested capital to just $0.32.
Things have looked better over longer horizons, with the caveat that the number of independent observations among rolling return windows dwindles as the horizon lengthens—just five for the 20-year returns. But the frequency of negative returns decreases as the investment period expands, and no stretch over 184 months has been negative.
The US government shut down after Congress was unable to reach a funding agreement. This is the 11th shutdown since 1981. During these shutdowns, many nonessential functions of the government cease. In most cases, the fiscal shortfall was resolved within a few days. However, four shutdowns lasted at least five days.
How did stocks fare during these prolonged episodes?
Index funds were a step in the right direction.
Investors were fed up with the high fees and poor performance from stock-picking active managers. Decades of evidence are now suggesting that very few actively managed funds consistently beat the market. That means a rules-based investment proposition with low expense ratios and broad diversification offers an appealing alternative. But, even with index-fund investing come limitations.
A rigid implementation process that prioritizes trackability over expected returns may be costing investors hundreds of millions of dollars each year—if not more. And arbitrary construction rules for security inclusion may result in notable deviations from the market. There is a better way for investors to get market returns with low cost, while not paying extra in the hidden costs of indexing.
