John Bogle has cautioned, “Too many investors-individuals and institutions alike-are constantly making investment decisions based on the lessons of the recent, or even the extended, past.”
Here is a chart of the major asset classes sorted by the differences between the penultimate downturn and the last one:
| Asset Class | 8/2000 – 9/2002 | 10/2007 – 2/2009 | Difference |
| DJ US REIT | 21% | -66% | 87% |
| Alerian MLP | 59% | -28% | 87% |
| R2000V | 8% | -51% | 59% |
| GSCI | 6% | -49% | 55% |
| R3000V | -18% | -54% | 36% |
| R1000V | -19% | -54% | 35% |
| MSCI EAFE Small | -25% | -57% | 32% |
| Barcap Long | 30% | 4% | 26% |
| R2000 | -25% | -51% | 25% |
| Barcap 5-10yr | 30% | 6% | 24% |
| MSCI EM | -34% | -57% | 23% |
| CSFB HY | -2% | -24% | 22% |
| Barcap AGG | 25% | 7% | 18% |
| Barcap 1-5yr | 22% | 8% | 14% |
| MSCI EAFE | -42% | -55% | 13% |
| ML Conv. | -27% | -39% | 13% |
| 3Yr TSY | 23% | 11% | 11% |
| R3000 | -40% | -50% | 10% |
| DJ Broad Stock Mkt. | -40% | -50% | 10% |
| R1000 | -41% | -50% | 9% |
| S&P 500 | -41% | -50% | 9% |
| 3Mo TSY | 8% | 2% | 5% |
| 6Mo CD | 11% | 6% | 4% |
| 3Mo CD | 9% | 5% | 4% |
| BLS CPI | 5% | 2% | 3% |
| R2000G | -51% | -50% | 0% |
| R3000G | -58% | -47% | -11% |
| R1000G | -58% | -46% | -12% |
As you can see, owning REITS, commodities, small value stocks, and MLPs all were great in the dot com aftermath and fixed income did really well also. While the S&P 500 was going down 41%, equal weighting of the four assets mentioned earlier would have been up 24%, and an equal weighting of the four fixed income indexes highlighted would have been up 27%. Thus a 75/25 portfolio (pretty aggressive) of 50% S&P 500, 6.25% each in the 4 fixed income assets, and 6.25% in the 4 other assets mentioned would have been down 8.1% in the earlier downturn. But in the more recent financial crisis it would have been down 35.7%.