Asset Returns

Josh Brown over at the Reformed Broker puts up some interesting observations about asset classes.  I'm republishing it below as well as the Callan asset return periodic table.

Periodic Table of Investment Returns 1994-2013

…..They serve as a healthy reminder that:

a) asset classes rally in multi-year streaks…

b) …except when they don’t

c) any asset class can “win” any given year, and any can “lose” – even last year’s big winners

d) diversification is superior to trend-following for most investors

e) when everyone has given up on an asset class, the wheel is about to turn and fortune is about to shine its light into the dark corner we least expect it to

f) most importantly, there is no one in the universe who has correctly handicapped all these shifts, because if there were he or she would be managing trillions of dollars.

Using simple math, an equal allocation last year to each of these would have returned just under 21% last year.  Adding cash to that mix lowers the return to just under 19%.

Links:  The Reformed Broker.com: Periodic Table of Investment Returns 1994-2013.
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