View from the Observation Deck

1. We have noted in previous blog posts that retail investors have liquidated hundreds of billions of dollars from U.S. Domestic Equity Funds, especially over the past three years.
2. Despite what seemed like an endless barrage of bad news throughout that span, the S&P 500 managed to post a cumulative total return of 45.8% for the three-year period ended 8/28/12.
3. That 45.8% return breaks down to an annualized gain of 13.4%, which easily eclipses the 9.8% annualized gain for the S&P 500 from 1926-2011, according to Ibbotson Associates/Morningstar.
4. The S&P 500 has posted a 13.7% total return year-to-date (as of 8/28). So what about the rest of the year?
5. With August coming to a close, we thought investors might appreciate a look at how the S&P 500 and its major sectors have performed over the last four months of the calendar year (see chart).
6. Keep in mind that the performance returns referenced in the chart include 8 of the 10 years that constituted the so-called "Lost Decade" from 2000-2009, and yet the returns were appealing, in our opinion.