You’ve heard the stories on how the year before a presidential
election year, along with the election year itself, have historically
been powerful times to invest in equities. Well, the facts below
do paint a compelling story. Of course the biggest reason for the
positive bias is the fact that Congress and the administration in
power are normally priming the fiscal pumps to ensure that all of
us feel good when we enter the voting booth. Most eras, “It’s
about the economy, stupid,” has a truthful ring to it.
Year…..S&P 500…..Small Caps
2004………?………………..?…….
2003……+13.4*…….+21.6%*
2000……-9.1%……….-3.6%
1999……+21.1%…….+29.8%
1996……+23.1%…….+17.6%
1995……+37.4%…….+34.5%
1992……+7.7%……..+23.4%
1991……+30.6%…….+44.6%
1988……+16.8%…….+22.9%
1987……+5.2%………-9.3%
1984……+6.3%………-6.7%
1983……+22.5%…….+39.7%
1980……+32.4%…….+39.9%
1979……+18.4%…….+43.5%
1976……+23.8%……+57.4%
1975……+37.2%……+52.8%
1972……+19.0%……+4.4%
1971……+14.3%……+16.5%
1968……+11.1%……+36.0%
1967……+24.0%……+83.6%
1964……+16.5%……+23.5%
1963……+22.8%……+23.6%
1960……..+0.5……..-3.3%
1959……+12.0%……+16.4%
1956…….+6.6%……..+4.3%
1955……+31.6%…..+20.4%
1952……+18.4%……+3.0%
1951……+24.0%……+7.8%
1948……+5.5%……..-2.1%
1947……+5.7%……..+0.9%
1944……+19.8%……+53.7%
1943……+25.9%……+88.4%
1940…….-9.8%………-5.2%
1939……-0.4%……..+0.4%
1936……+33.9%…..+64.8%
1935……+47.7%…..+40.2%
*Returns as of June 11. Small cap return represented by DFA
Micro Cap Fund. Russell 2000 is up +18.9%, year-to-date, thru
6/11.
[Source: Ibbotson Associates / 2003 Yearbook]
Ibbotson has employed various indices in calculating small cap
returns since 1926, namely the fifth capitalization quintile of
stocks on the New York Stock Exchange for 1926-81,
Dimensional Fund Advisors’ Small Company Fund, 1982-2001,
and, since April 2001, the DFA Micro Cap Fund.
Wall Street History will return next week.
Brian Trumbore
