Shifting Sands: Tracking Asset Trends Over Time

Garrett Fish (00:00):

Welcome to Street View, where we look past the headlines and focus on what truly matters for long-term investors. I'm Garrett Fish, Head of Model Portfolio Management here at LPL Research. Take a walk with me as we step back through more than 30 years of market history. To highlight a consistent pattern, market leadership changes and diversified investors are built to endure. All charts today come from LPL Research and Bloomberg. Let's begin In the 1990s, it was a decade of technological advance, a productivity boom, and a long economic expansion. The first chart shows how leadership rotated U.S. equities led at times, but developed international equities and emerging market equities also took a turn in leadership. When equities cooled bonds often provided the steadiness that helped keep portfolios on track. What wins one year seldom wins the next, now into the two thousands, a decade with a completely different personality.

Garrett Fish (01:02):

The Dotcom unwind mid decade, global growth, and the global financial crisis where U.S. equities struggled. While other areas led emerging markets, developed international equities, and bonds. The winners of one era are rarely the winners of the next. From 2010 through 2019, the market had entered a new phase of expansion. Innovation helped drive equity momentum led by cloud computing, the expansion of mobile technology and the digitization of the economy. But the path was not linear. Here we see rotations around events like the Taper Tantrum, the European debt crisis in 2015 and 2016, global slowdown at different times, developed international equities or bonds moved up to provide balance markets move in cycles, not in straight lines. Diversification helps investors stay aligned through each turn. And then the most recent chapter 2020 through 2025, a period defined by rapid rotation, pandemic shocks, supply chain bottlenecks, the highest inflation in 40 years, and one of the sharpest rate hike cycles on record.

Garrett Fish (02:18):

At the same time. Rapid progress in artificial intelligence helped power new waves of technology leadership. U.S. equity sold off then rebounded developed. International equities moved in and out of favor and bonds experienced one of the most dynamic periods in years. Markets can change direction quickly and predicting those terms is incredibly difficult. That's why diversification remains one of the most effective tools for navigating uncertainty. If you take nothing else away, no asset class stays on top forever. Underperformance cycles can last years and the next decade rarely looks like the last. Looking ahead, leadership will shift again just as it always has. You don't have to guess the next rotation to be well positioned for it. A disciplined, diversified approach helps investors participate wherever the next opportunities emerge. At LPL Research, we are here to help you navigate these cycles with clarity, confidence, and discipline. Thank you for joining me. I'm Garrett Fish. See you next time.