Helped mainly by the massive gain since late October, the S&P 500’s one-year trailing total return through the end of March clocked in at an eye-watering 30.5%, or nearly triple the historical average of 11.8%.While the rally over the last year has been well above average, it followed a period of weak returns in the prior year.When you combine the last two years, the S&P 500’s annualized gain of 9.7% is nearly a full percentage point below the long-term historical average.Looking out over the last five and ten years, annualized returns have been well above average, but over the prior twenty years, the S&P 500's performance has been sub-par.

Equity market returns may have been below average over the last two and twenty years, but you won't find many equity investors looking to trade shoes with investors hiding out in long-term (LT) US Treasuries.The chart below shows the annualized total return of the Bank of America/Merrill Lynch index of 10+ Year US Treasuries over various timeframes.Over the last year, LT Treasuries declined 4.8% versus a long-term average annualized gain of 8.1%. If you think that’s bad, check out the two-year annualized decline of 13.1%...in Treasuries!That’s a 25% haircut!Even over the last five years, LT Treasury returns have been negative to the tune of 1.6% annualized. To find – not better than average – but simply positive returns, you have to go out to the ten-year window, where the total return is just 1.6% annualized and still seven percentage points less than the historical average.While technically not a lost decade, it's been a loser of a decade for sure.

More By This Author: