As we begin 2020, we’ve had a chance to reflect on what was an unprecedented decade for financial markets. The 2010s taught long-term investors two important lessons: to ignore short-term market noise and to be prepared for volatility. It was a curious time, but many investors who followed the basic principles of long-term investing and diversification ultimately triumphed. 

Lesson #1: Be Patient With Stocks

The S&P 500 Index embarked on a historically long rally last decade. At the end of 2009, the benchmark was nine months into what would become the longest bull market on record (129 months and counting). Si

U.S. stocks ended a volatile, holiday-shortened week little changed, capping off a very strong 2019 in which the S&P 500 Index returned more than 31%. All major averages closed at fresh record highs on January 2, the first trading day of the New Year. Then, stocks sold off Friday after a top Iranian general was killed in a U.S. airstrike, leaving the S&P 500 near where it started week.

The Nasdaq was the best performing domestic index for the week (and in 2019), gaining on strength in the technology sector. Growth outperformed value stocks, which were weighed down by declines in the health care, consumer staples, and util

It was the best year for stocks (S&P 500 Index) since 2013 and the best year for bonds (Bloomberg Barclays U.S. Aggregate Bond Index) since 2002.  The diversified investor had an especially good year: A hypothetical 60/40 portfolio with 60% in S&P 500 stocks and 40% in a diversified portfolio of bonds would have posted its best annual performance since 1997.

In 2019, markets also more than made up for the pain of 2018. That was the first year since 1969 in which both stocks and bonds were down during the same year.

Looking out to 2020, it might seem unlikely the strong momentum in stocks could continue. H

The inverted yield curve was the biggest story of 2019 in the bond market. Historically, when long-term bond yields fall below short-term yields, as the 2- and 10-year Treasury yields did in August, recessions have tended to follow, though with wildly varying lead times. Thankfully, the yield curve has normalized since then as the 10-year yield has rallied.

“The recent steepening of the Treasury yield curve is an encouraging sign for the U.S. economy and markets,” said LPL Chief Investment Strategist John Lynch. “Continued calmness in the credit markets suggests this popular recession signal may have given us a