Callan Table 2022

[jazz4cash]

I haven't seen this posted. Mods feel free to delete if this is a duplicate.

The Callan Periodic Table of Investment Returns shows annual investment returns by asset class. It is generally used to demonstrate the value of diversification. In case anyone was asleep at the wheel, it was a rough year.

[Koolau]

Quote:

Originally Posted by jazz4cash I haven't seen this posted. Mods feel free to delete if this is a duplicate. The Callan Periodic Table of Investment Returns shows annual investment returns by asset class. It is generally used to demonstrate the value of diversification. In case anyone was asleep at the wheel, it was a rough year.

Yeah, I guess the only way to avoid losses (numerical losses, that is) was NOT to be IN the markets. Even then, cash equivalents were actually a loser when factoring in inflation. A "bad" year any way you look at it. BUT 2023 is another year. Guaranteed the table will look different come Dec. 31.

Diversify - though YMMV.

[tulak]

Thanks for posting. I haven’t seen it yet for 2022 and always like to stare at the boxes for a few minutes to see if I can find a pattern.

[Koolau]

Quote:

Originally Posted by tulak Thanks for posting. I haven’t seen it yet for 2022 and always like to stare at the boxes for a few minutes to see if I can find a pattern.

Heh, heh, '22's pattern was easy - everything was bad, though a few things were worse than others, so YMMV.

I do wonder why PMs are not listed. Are they included in cash equivalents? Something else? Here is a site (an ad, really) which suggests a diversified portfolio of PMs would have done a bit better than cash equivalents. Clearly, YMMV.

https://www.kitco.com/news/2023-01-0...thers-did.html

[athena53]

Quote:

Originally Posted by tulak Thanks for posting. I haven’t seen it yet for 2022 and always like to stare at the boxes for a few minutes to see if I can find a pattern.

There is no pattern! Thanks from me, too. I LOVE good graphical displays that help you understand a complicated set of numbers and this is one of the best. It really shows why you shouldn't chase the latest hot category or dump everything in one that's out of favor.

[audreyh1]

Yep, that’s the point, there is no pattern, but you can see that asset classes rotate through positions fairly often, sometimes gradually, sometimes fast, but no predictably other than constant change.

[OldShooter]

Quote:

Originally Posted by tulak ... always like to stare at the boxes for a few minutes to see if I can find a pattern.

Quote:

Originally Posted by athena53 There is no pattern! ...

Quote:

Originally Posted by audreyh1 Yep, that’s the point, there is no pattern, ... no predictably other than constant change.

Yup. It explains pretty clearly why managed stock funds also have random results. No one can predict random.

[jazz4cash]

Quote:

Originally Posted by Koolau . I do wonder why PMs are not listed. Are they included in cash equivalents?

Nope, cash is measured as 30 day Tbill. They have many other tables but I couldn’t find one with precious metals.

[Markola]

Who am I to argue with Callan but my Vanguard International Bond Index Fund had virtually identical returns to the domestic one, and certainly better than the S&P 500 index fund. Vanguard’s benchmark index must have been a better performing one in 2022.

[Markola]

For kicks, here’s Blackrock’s version.[ATTACH]


Makes me feel surprised but a LOT better about the large % of Japanese equities in my Vanguard Total International Stock Index Fund. I assumed they were nothing but a drag.

[Koolau]

^^^^^^^^^

Quote:

Originally Posted by Markola For kicks, here’s Blackrock’s version.[ATTACH] Makes me feel surprised but a LOT better about the large % of Japanese equities in my Vanguard Total International Stock Index Fund. I assumed they were nothing but a drag.

Ahhhh! That display answers my question. Of course! It's COMMODITIES where one would put PMs. How could I forget? Of course, that's a broad based set of commodities, so PMs could be up/down/sideways and not be noticed.

Looks like they (happened) to do well in '22. YMMV

[athena53]

I entered the numbers from the chart a few years ago and just updated them. Here's the average annual return over 22 years by category.

1.8% Cash
3.3% Dev x-US Eq
7.4% Emerging Mkt Eq
2.3% Global x-US Fixed
6.5% High Yield
6.6% Large Eq
7.1% Real Estate
7.3% Small Cap Eq
4.2% US Fixed

[OldShooter]

Is that just a straight average? Issue is years with negative returns. Down 20% then up 20% averages zero but actually results in -4%.

[Dtail]

Quote:

Originally Posted by athena53 I entered the numbers from the chart a few years ago and just updated them. Here's the average annual return over 22 years by category. 1.8% Cash 3.3% Dev x-US Eq 7.4% Emerging Mkt Eq 2.3% Global x-US Fixed 6.5% High Yield 6.6% Large Eq 7.1% Real Estate 7.3% Small Cap Eq 4.2% US Fixed

Interesting.
Can we interpolate from your posting that the 2000 year retiree has not achieved the long range 10% equity type returns?

[jazz4cash]

Quote:

Originally Posted by athena53 I entered the numbers from the chart a few years ago and just updated them. Here's the average annual return over 22 years by category. 1.8%Cash 3.3%Dev x-US Eq 7.4%Emerging Mkt Eq 2.3%Global x-US Fixed 6.5%High Yield 6.6%Large Eq 7.1%Real Estate 7.3%Small Cap Eq 4.2%US Fixed

I saw this as Cash in #1 position with an 8% annual return over 22 yrs. Nearly fell out of my chair.

[athena53]

Quote:

Originally Posted by OldShooter Is that just a straight average? Issue is years with negative returns. Down 20% then up 20% averages zero but actually results in -4%.

It's compounded. If I were measuring 3 years and the results were -6, +5 and +2, I'd multiply (.94*1.05*1.02), take that to the 1/3 power and subtract 1.0 to get the average annual return. Totally agreed that (-6+5+2)/3 is not the right answer!