Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Asset Class Performance year after year
Old 02-06-2013, 07:27 PM   #1
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 8,357
Asset Class Performance year after year

Callan publishes this neat "periodic table" graphic each year that well illustrates the relative performance of various asset classes year after year over the past 20 years. Asset classes are ranked by performance each year top to bottom. The absolute performance is also given. It can be a real eye opener.

The Callan Periodic Table of Investment Returns updated for 2012:
http://www.callan.com/research/downl...free%2f655.pdf

Someone over at Morningstar always remembers to publish it, which is good, because I always forget, even though it's one of my favorite investment graphics.
__________________

__________________
Life After FIRE - we redesign it every 5 years!
audreyh1 is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 02-06-2013, 09:24 PM   #2
Recycles dryer sheets
 
Join Date: Sep 2006
Posts: 162
This *is* a classic and one of my favorites, too. Helps me to keep the faith when something or other is lagging. Thanks for posting here.
__________________

__________________
rockyj is offline   Reply With Quote
Old 02-06-2013, 09:34 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Jun 2010
Posts: 1,416
It's neat to look for patterns in the graph, like how often emerging market is at the top or bottom.
__________________
photoguy is offline   Reply With Quote
Old 02-06-2013, 11:16 PM   #4
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,172
Quote:
Originally Posted by photoguy View Post
It's neat to look for patterns in the graph, like how often emerging market is at the top or bottom.
...and how seldom it is anywhere else--only three years out of the last 20, and two of those it was the next to the top or bottom.
__________________
kyounge1956 is offline   Reply With Quote
Old 02-07-2013, 02:19 AM   #5
Recycles dryer sheets
 
Join Date: Jul 2008
Location: Sacramento area
Posts: 438
I did a quick calc... if you had invested equally in those buckets, over the years (I found charts back to 1987) the average return was 10.6%. Interesting. Good years +30% a couple of times and +20% half a dozen years. Bad year off 30% once.

Interesting.
__________________
AWeinel is offline   Reply With Quote
Old 02-07-2013, 04:37 AM   #6
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,760
kind of like the permanent portfolio theory which always has something diown yet managed a almost 10% cagr return for almost 40 years.

it had lots of luck for sure as it was never designed as a growth vehicle but it still shows us it is as much about gaining as it is about not losing.
__________________
mathjak107 is offline   Reply With Quote
Old 02-07-2013, 05:03 AM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 9,003
Thanks! I enjoy looking at that format, and had not seen anything current in at least 5 years. Now I know where to look in the future, if I remember.

And seeing returns for all asset classes in 2008 sends shivers down my spine (again). Fortunately I held everything and more than recovered in time, thanks to Saint Jack and Dr B.
__________________
ďI try to be cynical, but I just canít keep up." Lily Tomlin
Retired Jun 2011 at age 57
Target AA: 55% equity funds / 40% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 02-07-2013, 07:33 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Posts: 7,641
Quote:
Originally Posted by photoguy View Post
It's neat to look for patterns in the graph, like how often emerging market is at the top or bottom.
High risk/high reward
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
pb4uski is offline   Reply With Quote
Old 02-07-2013, 07:43 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 8,357
Quote:
Originally Posted by photoguy View Post
It's neat to look for patterns in the graph, like how often emerging market is at the top or bottom.
I think if REITs had been included as one of the asset classes, the pattern would have been similar.
__________________
Life After FIRE - we redesign it every 5 years!
audreyh1 is online now   Reply With Quote
Old 02-07-2013, 08:27 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair
Posts: 10,783
Quote:
Originally Posted by audreyh1 View Post
I think if REITs had been included as one of the asset classes, the pattern would have been similar.
The REIT I hold is the only holding that regularly hits my rebalance bands.
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 02-07-2013, 10:45 AM   #11
Full time employment: Posting here.
Tyro's Avatar
 
Join Date: Aug 2012
Location: Upstate
Posts: 699
I think a similar table for the next 20 years might be more useful.

I wish I knew could remember enough math to use the chart/data to come up with an optimal AA.

Tyro
__________________
Yeah well, that's just, ya know, like, your opinion, man. ~ The Dude
Tyro is offline   Reply With Quote
Old 02-07-2013, 10:58 AM   #12
Thinks s/he gets paid by the post
 
Join Date: Jul 2012
Location: Mississippi
Posts: 1,482
The periodic table format is a nice way to view the classes. Here is one for 20yrs including cash and real estate, and annualized returns for 10, 20 yrs.

http://ljcooper.squarespace.com/stor...rst%20Page.pdf
__________________
rbmrtn is offline   Reply With Quote
Old 02-07-2013, 02:43 PM   #13
Thinks s/he gets paid by the post
walkinwood's Avatar
 
Join Date: Jul 2006
Location: Denver
Posts: 2,028
Makes me appreciate the wisdom of AA & rebalancing. Thanks for posting.
__________________
walkinwood is offline   Reply With Quote
Old 02-07-2013, 03:48 PM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 8,357
Quote:
Originally Posted by walkinwood View Post
Makes me appreciate the wisdom of AA & rebalancing. Thanks for posting.
Me too. When I think about people fretting about an asset class that did poorly the year before and not wanting to add to it, or hesitate to trim a bit from an asset class that did great the year before, this chart pops into my head. The rankings change often, year after year. And often a way outperforming asset class in one year, way underperforms the next. But then again, sometimes not. So you never know - as the chart aptly illustrates.
__________________
Life After FIRE - we redesign it every 5 years!
audreyh1 is online now   Reply With Quote
Old 02-07-2013, 03:49 PM   #15
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 8,357
Quote:
Originally Posted by rbmrtn View Post
The periodic table format is a nice way to view the classes. Here is one for 20yrs including cash and real estate, and annualized returns for 10, 20 yrs.

http://ljcooper.squarespace.com/stor...rst%20Page.pdf
Thanks much for that one. I really did want to see the other asset classes.
__________________
Life After FIRE - we redesign it every 5 years!
audreyh1 is online now   Reply With Quote
Old 02-07-2013, 03:57 PM   #16
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 9,096
Audrey, thanks for the post. I always enjoy seeing this and it serves as a good reminder about the value of diversification.

Quote:
Originally Posted by rbmrtn View Post
The periodic table format is a nice way to view the classes. Here is one for 20yrs including cash and real estate, and annualized returns for 10, 20 yrs.

http://ljcooper.squarespace.com/stor...rst%20Page.pdf
Very nice, especially the returns of real estate. I wonder what is included in that block--commercial real estate, houses? Can I get that return with with a "typical" REIT? It seems I recall reading that REITs had limited value as a "diversifier" as their performance had come to closely shadow US equities.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 02-07-2013, 04:25 PM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 8,357
Quote:
Originally Posted by samclem View Post
Audrey, thanks for the post. I always enjoy seeing this and it serves as a good reminder about the value of diversification.


Very nice, especially the returns of real estate. I wonder what is included in that block--commercial real estate, houses? Can I get that return with with a "typical" REIT? It seems I recall reading that REITs had limited value as a "diversifier" as their performance had come to closely shadow US equities.
Purely anecdotal, of course, but I have found that my REIT funds are often totally out of step with my other equity funds. Sometimes it's a matter of degree - way ahead in up markets or way behind in down. But sometimes they are up while the rest are down and vice-versa.

Technically, REITs are mid-cap stocks. But IMO they often don't behave like my other mid-cap stock funds.
__________________
Life After FIRE - we redesign it every 5 years!
audreyh1 is online now   Reply With Quote
Old 02-07-2013, 05:57 PM   #18
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: Chicagoland
Posts: 9,003
Quote:
Originally Posted by audreyh1 View Post
Purely anecdotal, of course, but I have found that my REIT funds are often totally out of step with my other equity funds. Sometimes it's a matter of degree - way ahead in up markets or way behind in down. But sometimes they are up while the rest are down and vice-versa.

Technically, REITs are mid-cap stocks. But IMO they often don't behave like my other mid-cap stock funds.
That's the main reason I own a REIT fund, typically low/negative correlation with other equity funds. I assume it's the reason many investors do, Dr B taught me...
__________________
ďI try to be cynical, but I just canít keep up." Lily Tomlin
Retired Jun 2011 at age 57
Target AA: 55% equity funds / 40% bond funds / 5% cash
Target WR: Approx 2.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 02-07-2013, 06:28 PM   #19
Thinks s/he gets paid by the post
RonBoyd's Avatar
 
Join Date: Dec 2007
Location: Denver, Colorado
Posts: 4,402
Quote:
Originally Posted by Midpack View Post
That's the main reason I own a REIT fund, typically low/negative correlation with other equity funds. I assume it's the reason many investors do, Dr B taught me...
That's the reason we have ~3.5% of our portfolio in VNQ. (And that is one of the higher % holdings.)
__________________
"It's tough to make predictions, especially when it involves the future." ~Attributed to many
"In theory, there is no difference between theory and practice. But, in practice, there is." ~(perhaps by) Yogi Berra
"Those who have knowledge, don't predict. Those who predict, don't have knowledge."~ Lau tzu
RonBoyd is offline   Reply With Quote
Old 02-07-2013, 06:40 PM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Posts: 7,641
Quote:
Originally Posted by Midpack View Post
That's the main reason I own a REIT fund, typically low/negative correlation with other equity funds. I assume it's the reason many investors do, Dr B taught me...
What I've never been able to decide is whether I need/should have REITs in addition to the 4% real estate that is included in the stock market as a whole (in the Total Stock Market Index Fund), and if so, how much.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
pb4uski is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 10:17 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2014, vBulletin Solutions, Inc.

Early Retirement News right to your Email!

Stay up-to-date with all the latest news to your inbox!

unsusbcribe at anytime with one click

Close [X]