Skip to Content
Quarter-End Insights

Markets Draw Toward the End of a Brutal Year

What held up as recession settled in?

Mentioned: , , , , , , , , ,

Investors are anxious for the year to close on one of the most brutal markets in history, which has rendered Wall Street's landscape nearly unrecognizable. All of Morningstar's diversified equity indexes declined precipitously during 2008, with the Morningstar U.S. Market Index down 39.3% for the year through Dec. 26.

In general, the growth categories trailed the value categories, but not by much. The mid-growth index posted the worst return, with a breathtaking 48% skid for the year to date. Large-cap categories did somewhat better than their mid-cap and small-cap brethren, with the Morningstar Large Core Index posting the smallest loss (-33.8%). As Morningstar mutual fund analyst David Kathman noted in a recent Morningstar article, it appears as if investors are according the greatest favor to larger, well-capitalized companies that have durable competitive advantages (or "moats") and can sustain themselves with their own free cash flow.

To view this article, become a Morningstar Basic member.

Register for Free

John Coumarianos has a position in the following securities mentioned above: TXN. Find out about Morningstar’s editorial policies.