Similar so-called periodic tables of investment returns are produced by others, but the BlackRock table is unique in its inclusion of a diversified portfolio. The diversified portfolio is an excellent benchmark for many DIY investors. It is comprised of low-cost, indexed exchange traded funds, as shown below. The 20-year annualized return of the portfolio was 8.89% for the 20-year period ended 12/31/2010.
The table shows how the return on the diversified portfolio has been much less volatile than individual sectors. The table also shows the futility of predicting sector performance: the best-performing sectors many times are the worst-performing sectors in ensuing years. Overall, the table is an excellent starting point for the all-important subject of risk management and asset allocation.
The updated performance of the components of the BlackRock Standard Diversified Portfolio over the first 9 months of calendar year 2011 is shown in the table: CLICK TABLE TO ENLARGE
Data Source: Morningstar |
Disclosure: The data shown here is for educational purposes only. No recommendations are made. Individual investors should do their own research and/or consult with a professional advisor. Although data has been obtained from reliable sources, its accuracy cannot be guaranteed. I am not affiliated with BlackRock or Morningstar.
A 5% return (with low expenses) in this market is certainly nothing to dismiss.
ReplyDeletere: Shawn That's a -5.14% return. I had a typo. Thanks for commenting, I wouldn't have caught it otherwise!
ReplyDeleteA diversified portfolio doesn't participate in the the highs or the lows and keeps the right balance between risky and rewarding times!
ReplyDeleteThat is an excellent link!
-5% is not bad for all the craziness of the markets right now.
ReplyDelete