This year is shaping up to be one of the best ever for investors of all stripes, with nearly every single asset class on track to finish 2019 in the green.
From stocks to government debt to corporate bonds to commodities, no matter where you went, you reaped a profit this year. The S&P 500 is up more than 25% and counting. Treasurys, which tend to fall when risk assets rally, also gained in 2019. Oil, gold and corporate bonds all scored double-digit returns.
For stock investors specifically, it was hard to guess wrong. A look at the S&P 500 companies' internal performance shows only 64 names, or 12%, are down this year.
All 11 S&P 500 sectors are ending the year with positive returns. Tech is the biggest winner this year with a 41.5% gain. Communication services, industrials, financials, real estate, consumer sectors all skyrocketed more than 20% this year.
It might seem a little too good to be true as the markets have been grappling with a handful of risks that are almost unprecedented — a costly trade war with China and a bid to impeach the president.
But thank the Federal Reserve for coming to the rescue. The central bank pulled a 180, cutting rates three straight times this year. The Fed has also been pumping billions into the financial system after the mid-September tumult in very short-term lending markets.
"We've gotten three rate cuts as we know and a dramatic rise in the size of their balance sheet in a very short period of time," said Peter Boockvar, chief investment officer at Bleakley Advisory Group. The markets "see an expansion of the Fed's balance sheet to the extent it's grown and the only response is, it's QE. Buy everything."
The stimulus has lowered interest rates, pushing all assets up at the same time.
It was just last year when almost nothing worked for investors. In 2018, just about every single asset class one can invest in posted negative returns or unchanged performance. With the trade war still unresolved and the election coming up, Wall Street is forecasting much more modest gains next year.
Wall Street's equity strategists are generally more cautious about 2020, with the average S&P 500 target of 3,272 implying a little more than 5% gain.
"What a year for the stock market," Matthew Maley, chief market strategist at Miller Tabak, said in a note Monday. "One reason why the consensus believes the stock market can hold up next year has to do with the belief that interest rates will remain low."
Most strategists believe investment selection will come back into play next year as the economy reaches late cycle territory. Morgan Stanley said Monday that investors should go into defense stocks like Coca-Cola.
— CNBC's Nate Rattner contributed to this report.