In the world of fiduciary investment portfolios, we’ve been on a fairly steady roll over the past few years. We saw economic collapse on a global scale in 2020 as a result of the worldwide pandemic, but somehow, at the end of the year, the major stock and bond indices produced positive returns. On the other hand, both the stock and bond indices produced disastrous results in 2022. It was one of the only years in recent history wherein both stocks and bonds sustained significant losses. And yet, investment performance the very next year was quite strong, and 2024 was another good year.

There were myriad reasons for investment values to drop in 2025 – major layoffs and job losses, rising inflation, implementation of fairly severe tariffs, economic uncertainty – to name the most obvious. There was also tremendous upheaval in the federal government – massive firings by the Department of Government Efficiency (DOGE), a major effort to combat illegal immigration, and a Congress more divided than ever before. But somehow, the values of traditional mainstream investments still managed to rise over the course of the year.

Here are some of the facts . . .

Last year at this time, we were talking about how well traditional investment portfolios had done in 2023. After a truly disastrous performance in 2022, the stock market came roaring back in 2023, and the bond side held its own. Long-term performance averages seemed reliable again, and investors regained their confidence. So how did traditional investment portfolios do in 2024? As it turns out, they did quite well. Roughly speaking, the investment performance for traditional investment portfolios in 2024 was a repeat of the robust performance in 2023. Let’s take a look at some of the details.

A year ago, we published an article under the tongue-in-cheek title of “That’s Alright, It Was Only Money.” We wanted to update our understanding of historical performance results for traditional investment portfolios after the disastrous conclusion of the year 2022. We used the S&P 500 Index as the benchmark for stocks and Barclay’s Aggregate Bond Index as the benchmark for fixed income. In 2022, the former ended the year with a return of minus 13.01%, and the latter ended the year with a return of minus 19.44%. That meant our prototypical investment portfolio, invested 50% in stocks and 50% in bonds, saw a blended investment return of minus 16.23%. At the time, we pointed out that the aggregate performance for 2022 was actually worse than the aggregate performance for the Great Recession year 2008, which was “only” minus 15.88%.

And now, after another year in the books, but with quite different results in 2023, we ask the question, “Are we back to normal?” It’s probably a rhetorical question, and it begs a more specific question: “What is normal, anyway?” The S&P 500 return in 2023 was 24.23%, and the Barclays Aggregate Bond Index return was 5.53%, resulting in a blended return of 14.88%. It was a great year for investment portfolios holding traditional asset classes! The improved numbers should make everyone feel a little better off. Does it give us greater confidence to make the argument that over many years, a prudent investor strategy results in positive returns? Let’s take a look at the actual numbers.

As Charles Dickens wrote in his A Tale of Two Cities: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness.” Those words were written in 1859, but they could have been written yesterday.

How do we even begin to describe the year that was 2020? It was a year of so many extremes – a once-in-a-century pandemic, the most widely contested elections in U.S. history, unprecedented economic collapse, historic unemployment, tsunamis of misinformation and disinformation, and truly unimaginable levels of mistrust, suffering, and despair in the souls of people everywhere.