We thought you might be interested in reviewing the following regarding the recent and historical performance of the S&P 500 and MSCI EAFE Indicies.
Since December, 31 1994, the S&P 500 Index has doubled providing annualized rates of return of 31.2%. This three year performance is almost two and one half times larger than the historical rolling three year average since 1979. The seven and ten year performance numbers for the S&P 500 are larger than the historical rolling seven and ten year averages as well.
Conversely, the MSCI EAFE Index has returned a paltry 6.3% since December, 31 1994 when the historical rolling three year average has been 15.2%. The seven and ten year performance of the MSCI EAFE Index is much less than the historical rolling seven ans ten year averages as well.
This historical study would seem to indicate that both indices are at the extremes of their historical return levels ans could possibly lead to a regression towards their norms at some future point.
We encourage you to continue to focus long term and globally; Also call us with any questions.
Thank you for your business and continued confidence.
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