Building Blocks Chart

The Building Blocks Chart is a pictorial depiction of the relative performance of asset classes over calendar-year periods. What’s the likelihood that last year’s winners will repeat? Should the investor avoid asset classes exhibiting recent poor performance? As the table illustrates, the relative performance of asset classes can shift dramatically from year to year. Investors… Read more »

Building Blocks Chart with Hypothetical 60/40 Portfolio

Our annually updated Asset Class Building Blocks Chart ranks the more important asset classes by their performance for each of the trailing 20 calendar years, with the best performing asset class for each year appearing at the top of its column, and the worst at the bottom. The chart includes the performance of a hypothetical… Read more »

The Risk Return Continuum

One way for an investor to find an asset allocation suitable to his risk tolerance is to track the behavior of a set of model portfolios. The investor considers the historical returns achieved by various diversified portfolios, each of which differs according to its percentage allocation to fixed income (bonds) versus equities (stocks). A low… Read more »