Tuesday, March 8, 2016

A Visual Guide To Asset Performance Over The Past Decade

Ben Carlson at A Wealth Of Common Sense updated one of my favorite financial visuals this week, the Asset Allocation Quilt, showing  the performance of different asset classes by year over the past decade.



You can see asset classes take turns outperforming and then underperforming their peers over time. This would make the case for diversification and/or suggest using a strategy that adds to asset classes when they underperform. Emerging markets were the top performer in 2012 and have had lackluster performances annually since. Commodities have been languishing for 5 long years.

The U.S. markets (small, mid, large cap stocks and REITS) have been hovering around the top of the quilt since 2012. My guess is that will reverse in the coming years with commodities, emerging markets and/or international stocks outperforming the United States. That process may have already begun with Brazilian stocks (black line) on a tear to start the year against developed markets (blue line):



And gold mining shares (black line) far outperforming the S&P 500 (blue line):



Everything takes turns rising and falling and it's usually when an asset class has been completely left for dead it finally begins to gain traction.

For more see: The Least (& Most) Expensive Stock Markets Around The World

Jim Rogers On Recessions, Debt & The Dollar

Career Advice