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Chart of the week

Stock returns flat amid 18 months of market gyrations

This week’s chart shows why a seesawing equities market could mean challenged forward-looking returns for investors.

May 31, 2019 | 1 minute read
S&P 500 Index
  • U.S. stocks fell more than 1% on Wednesday and are now down nearly 6% from their early-May peak.1 The significant volatility that stocks saw this week highlights the larger down-up-down moves investors experienced as the past 18 months delivered three record highs.
  • Despite the significant rally that stocks saw early this year, investors have still experienced a modestly negative return of approximately -2.5% since October 2018.1 Stock returns over a longer-term period have been similarly challenged.
  • Since the S&P 500 hit its late January 2018 peak of approximately 2,850, for example, it has seen significant swings. As the chart shows, however, with the index at 2,780, it sits slightly under its January 2018 high.1 In the nearly 18-month period, the S&P 500 has generated a meager total return of just 0.7%.1
  • Forward earnings expectations for 2019 have already declined significantly from one year ago as the global economic slowdown takes shape. Against this backdrop, investors could remain challenged in finding competitive returns across traditional asset classes.

  • S&P 500 Index, as of May 30, 2019.

The chart of the week and any accompanying data is for informational purposes only and shall not be considered an investment recommendation or promotion of FS Investments or any FS Investments fund. The chart of the week is subject to change at any time based on market or other conditions, and FS Investments and FS Investment Solutions, LLC disclaim any responsibility to update such market commentary. The chart of the week should not be relied on as investment advice, and because investment decisions for the FS Investments funds are based on numerous factors, may not be relied on as an indication of the investment intent of any FS Investments fund. None of FS Investments, its funds, FS Investment Solutions, LLC or their respective affiliates can be held responsible for any direct or incidental loss incurred as a result of any reliance on the chart of the week or other opinions expressed therein. Any discussion of past performance should not be used as an indicator of future results.

This information is educational in nature and does not constitute a financial promotion, investment advice or an inducement or incitement to participate in any product, offering or investment. FS Investments is not adopting, making a recommendation for or endorsing any investment strategy or particular security. All views, opinions and positions expressed herein are that of the author and do not necessarily reflect the views, opinions or positions of FS Investments. All opinions are subject to change without notice, and you should always obtain current information and perform due diligence before participating in any investment. FS Investments does not provide legal or tax advice and the information herein should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact any investment result. FS Investments cannot guarantee that the information herein is accurate, complete, or timely. FS Investments makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information.

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