Research Affiliates takes a look back at the last ten years and calculates the annualized return of a classic 60% equity / 40% fixed income portfolio versus 16 pure asset classes on their own.
The 60/40 portfolio generated 7.2% annual returns (nominal) from 2005 through the end of 2014, edging out 9 of the 16 asset classes in their data set and with significantly less volatility than most as well.
There is always something working in the Markets. It still surprises me how often it changes.
A look at the recent winners and losers (based on year-end performance) shows the volatility and varied nature of this list.
Who would have guessed the big winners this year would be Coffee and Cattle (though most of those gains came in the first half of the year)?
The chart below shows the top-and-bottom performing markets for the year. The data is color coded based on sector. The first column shows 2014 performance, followed by five columns of the most recent prior yearly market performances.