How Bad Has 2015 Been For Diversified Investors?
by Ryan Detrick
So just how tough has it been for diversified investors in 2015? Think about it, stocks and bonds are flat, cash makes you nothing and commodities tanked once again. Most years being diversified is the way to go, this year has been historically tough.
I took a look at various asset class returns over the past 30 years and made some hypothetical portfolios for each year. I put 50% into the S&P 500 (stocks), 25% into 10-yr bonds (bonds), 10% into commodities, and 15% into cash.
With two days to go, diversified investors are down 0.50% in 2015, the worst year since 2008 and one of the worst years going back 30 years.
Bigger image HERE.
A few thoughts on above.
* Even with two historic bear markets and the worst one day crash ever, the S&P 500 is still up +12% (with dividends) on average going back 30 years.
* Commodities are down on average the past 30 years.
* Commodities are down five straight years for the first time ever.
* A diversified portfolio returns nearly nine percent on average and has a lower standard deviation than either stocks or bonds.
What about if we took out commodities? I’m aware doing something like this is by itself a big buy signal, but I’ll do it anyways. The average for a diversified portfolio goes up to nearly 10% a year.
Thanks for reading. See more of our research at Kimble Charting Solutions and be sure to follow me on Twitter and StockTwits.
This post was originally published by Ryan Detrick on his blog.
Copyright © Ryan Detrick
