Unveiling the Illusion: The Truth Behind Stock Market Returns

The recent positive returns in the stock market, bonds, and money market funds may be deceptively high due to a quirk in the calendar and government disclosure rules. The returns are missing critical information that would make them look less impressive, and bond returns have flagged recently due to uncertainty about the economy, inflation, and interest rate increases. Money market funds, on the other hand, are in a positive position with yields averaging 4.94 percent. Longer-term investors should focus on the returns of stocks and bonds, which are more important but come with greater volatility. The recent gains in stock and bond fund returns are largely due to the exclusion of the poor performance of 2022 from the 12-month returns.