What, if any asset classes, were contrarily correlated during crash of 2008


Also, over a span of fifteen years, say 2000-2015, how would a "diversified" portfolio fared vs a portfolio primary comprised of stock index ETFs?

An interesting useful site for this is: https://dqydj.com/finance-calculators-investment-calculators-and-visualizations/#InvestmentCalculators

It contains a number of different calculators that can give you a rough rate of return (accounting for inflation and reinvestment of dividends) for a number of different returns.

According to it, from 1/1/2000 to 1/1/2016, using the S&P 500 calculator (adjusting for inflation, reinvesting dividends), an S&P 500 investment returned 29.216% over that time period, which very much underperformed A-rated corporate bonds at 69.776% - 79.708% for the same period. The S&P 500 investment even underperformed 10-year T-bills at 32.638%.

But you should note that that is a function of the window. If you extend the window from 1/1/2000 to 1/1/2018, the S&P 500 almost exactly ties the high end of the bonds. If instead you advanced the window 2 years (ie, not starting almost immediately preceding a crash), using 1/1/2002 - 1/1/2018, the S&P 500 becomes a clear winner at 140.367% vs the bonds' 50.598% - 61.324%. If you expand the window to 1/1/1989 (roughly the earliest date the site has bond data for) to 1/1/2018, the S&P 500 becomes 783.196% to the bonds' 185.206% - 209.755%.

This is why equities (and index funds in particular) are recommended as long term, not short term, investments.

For your specific question about an index-only vs a diversified portfolio, in the 1/1/2000 - 1/1/2016 window, the diversified portfolio would outperform because of its bond holdings; for 1/1/2000 - 1/1/2018, it would be equivalent, and for the other windows it would underperform. But the point of a diversified portfolio is not to maximize gains, it is to minimize risk, which becomes more and more useful the closer you get to actually withdrawing your investment.


Long-term Treasury bonds rose during the crash of 2008.


In terms of equities, all sectors were spanked in 2008 with financials getting hit the hardest, down over 50%. Defensive sectors fared much better with Consumer Staples down 16% and Utilities down 29%. Transportation stocks were down 21%. All other major SPDR sectors were down between 30% and 50%.

Stocks that performed well within a sector (up for the year) either had an edge over their competitors (for example, banks with lack of exposure to sub prime) or they had a special story (new products or technology, successful clinical trials for new drugs, etc.).

An oft repeated statement on the web is that gold does well in a recession. Sometimes it does and sometimes not. It's iffy. In 2008, GLD was up nearly 5% but during the year it had nearly a 35% draw down before recovering.

The place to be in a 2000 or 2008 bear market is short :->)