The U.S. stock market in 2013 was, quite literally, a perfect 10.
“All 10 sectors of the S&P posted double-digit gains on a total return basis last year — a rare market occurrence considering that it has been nearly 20 years since all 10 sectors of the S&P registered annual gains of 10% or more,” writes U.S. Trust’s chief market strategist Joseph Quinlan.
“2013 was a vintage year for U.S. equities,” Quinlan says.
The “Perfect 10” was last achieved in 1995 “following the equity blood bath in 1994 when the Federal Reserve brutally raised the Fed Funds rate six times.” In 2003 and 2009, the S&P had nine out of 10 sectors notch double-digit gains.
Check out the chart from U.S. Trust:
So, what does this mean?
“From time to time, investor euphoria toward a narrow group of stocks can put the broad market at risk,” said RBC Capital’s Jonathan Golub in November. “This was clearly the case in the late 1990s with Technology stocks.”
“Investors have recently raised concerns about the performance, and bubble-like behaviour, of a narrow group of stocks (i.e., Internet and Biotech names, Amazon, Chipotle),” he added. “However, when we look at the performance dispersion across the S&P 500, the market’s behaviour seems quite normal.”
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