Very Long-Term Asset Allocation Results

Nobody has the time or patience to wait 82 years to experience the long-term, but if they did (or if they wanted to bet on the future based on the long-term past), here is how a simple allocation between the S&P 500 index and the U.S. Aggregate Bond index worked out from 1926 through 2008.

Related proxy funds: SPY, IVV and VFINX for stocks; BND, AGG and VBMFX for bonds.

Disclosure: We own both SPY and BND.

Comments

[SeekingTruth:]

Of all the issues that intrigue and bedevil investors, asset allocation must vy strongly for the top of the list.
When checking the list for the sweet spot allocation, it looks like 50-50 and 60 (stocks)-40 (bonds) are good choices for many investors.
Other asset classes and sub classes are also necessary to consider, as cash , currencies, real estate, precious and strategic metals , energy, international and country weightings , etc.
Also asset classes with hedging and timing strategies, esp. when considering the dollar,energy, current threats, sector rotation, etc. would be helpful.
Any time you would like to expand this subject to include more asset classes and considerations, Richard, it would be fine with me, and I would enjoy the process..
Thanks for the good and useful data.

Nov 09 07:47 AM

[Fund Insider:]

If you have an account at Vanguard, they not only give you above numbers, but will tell you exactly how your portfolio would fall into the above chart. This includes non-vanguard funds too.

Nov 09 09:16 AM

[Living4Divi...:]

Thanks for the chart.

It would be nice if the chart had std devs in addition to the return. knowing the reward is great, but without knowing the "risk" it is hard to determine a risk/reward ratio and build an efficient frontier.

Nov 18 04:15 PM