9 charts summarize the history of capital markets over 96 years (1926-2021)

  • 2021 was a good year for stocks, but not for bonds
  • The recovery after 2008 has been spectacular, one of the best US stock exchanges in 13 years.
  • We provide a table of details for the whole 96 years as well as sub-periods of 5 years and 10 years

Here are the highlights of investment performance for the year 2021 and the 96 years 1926-2021:

  1. Most asset classes saw positive returns in 2021. Real estate and commodities lead with returns of 41%. Bonds and gold lost value over the year.
  2. Target date funds with long horizons and moderate risk delivered double-digit returns in 2021, as they did in 2020.
  3. Stocks, as measured by the S&P 500, returned 29% in 2021, triple the 96-year average of 10%. Bonds lost 2% based on the US Investment Grade (Bloomberg) Aggregate Index, well below the 96-year average of 6%.
  4. The 2021 equity return is above the median and the 2021 bond return is below the median.
  5. The recovery from the stock market crash of 2008 has been sensational. Stocks are up 600% in the past 13 years, one of the best 13-year stretches.
  6. Target date funds started in 2008 and reached $3 trillion. Conservative TDFs have gained 8% per year in their 14-year history, while aggressive TDFs have gained 9.5%. TDFs are excellent benchmarks for multi-asset portfolios.
  7. Details are provided in a table.
  8. There’s never been a worse time to retire.

1. Most asset classes saw positive returns in 2021. Real estate and commodities lead with returns of 41%. Bonds and gold lost value over the year.

2. Target-maturity funds with long horizons and moderate risk delivered double-digit returns in 2021, as they did in 2020.

Target Date Funds

3. Stocks, as measured by the S&P 500, returned 29% in 2021, triple the 96-year average of 10%. Bonds lost 2% based on the US Investment Grade (Bloomberg) Aggregate Index, well below the 96-year average of 6%.

Stock and Bond Returns

Source: Target Date Solutions

4. The 2021 equity return is above the median and the 2021 bond return is below the median.

96-year history of stock returns
96-year history of bond yields

5. The recovery from the stock market crash of 2008 has been sensational. Stocks are up 600% in the past 13 years, one of the best 13-year stretches.

13 years of consistently high yields

6. Target date funds started in 2008 and grew to $3 trillion. Conservative TDFs have gained 8% per year in their 14-year history, while aggressive TDFs have gained 9.5%. TDFs are excellent benchmarks for multi-asset portfolios.

Target Date Fund Returns

7. Details are provided in the following table.

Total yield table

Source: Target Date Solutions

8. There’s never been a worse time to retire

Despite recent high returns, and in part because of it, now is a terrible time for our 78 million baby boomers to retire, as summarized by the This interview. There are five reasons why it’s really different, and bad, this time and ten threats to the economy and the stock market that are endangering the lifestyle of baby boomers in this decade.

Ron Surz is CEO of Target date solutions, Sage Ageand GlidePath Wealth Managementand co-host of Baby Boomer Investment Fair that you can watch on repeat Patreon. He is the author of the Book Baby boomers are investing in the perilous decade of the 2020s.

Please watch and support our Baby Boomer Investment Fair and visit our Baby Boomer Librariesour Target Date Fund Blogand our GlidePath Blog.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.