Archives for January 15, 2015

Investment Returns Ranked Annually by Asset Class 1995-2014

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

Every year, investment consultant firm Callan Associates updates a neat visual representation of the relative performance of 8 major asset classes over the last 20 years. You can find the most recent one below (view as PDF), which covers 1995 to 2014. For each year, the best performing asset class is listed at the top, and it sorts downward until you have the worst performing asset. You can find previous versions here.

callan2014full

The Callan Periodic Table of Investment Returns conveys the strong case for diversification across asset classes (stocks vs. bonds), investment styles (growth vs. value), capitalizations (large vs. small), and equity markets (U.S. vs. international). The Table highlights the uncertainty inherent in all capital markets. Rankings change every year. Also noteworthy is the difference between absolute and relative performance, as returns for the top-performing asset class span a wide range over the past 20 years.

I like focusing on a specific color (asset class) and then visually noting how its relative performance has bounced around for a few years. The ones that enjoy a stint at the very top are usually found on the bottom eventually.

So instead of trying to predict one asset class that will outperform this year, why not commit to holding a multiple, productive asset classes that will balance each other out over time. Pick ones that will have a long-term positive return, but in any given year might perform poorly. Hold them in a low-cost manner, and rebalance your holdings if they get out of whack.

Simple Living and Minimalist Parenting Quotes

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

I was catching up on some long reads and finished the article When Mommy and Daddy Took the Toys Away which explored parents who are simplifying by keeping their kid’s toys and other material goods to a minimum.

Only having a few toys? Not expecting more toys when shopping? Huh, kind of sounds like my childhood. The snarky side of me just thinks that “minimalist parenting” sounds a whole lot like “parenting without gobs of disposable income”. In retrospect, it was so much easier for my parents. They had so much less money to spend! 😉

All kidding aside, I highlighted a couple of quotes in the article, as I think they apply to everyone. We all know that adults have their own toys and desires for more toys.

On dealing with envy:

“We don’t overcome envy in our lives by getting what another person has,” Becker says. “We overcome envy by being content with what we have and being grateful for what we have.”

On balancing simplicity and priorities (Salem is a kid):

“You don’t really need to have a whole lot of toys to be happy,” Salem says. “Just the ones that you really want.”

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