Cash, Bonds, Stocks & Inflation Tuesday, February 12, 2008
Posted by ei-forum in Investing.trackback
Today we will start a three part series with some interesting information on historic asset class returns displayed in graphic format.
The Graph only shows data up to 2002 but you get the picture… stocks outperform. Naturally, one should always have a diversified portfolio and allocate assets according to investor profile (age, risk tolerance, etc…) but it is still amazing to , not only, see the gap between stocks and bonds but also the small gap between Treasury bill and inflation!
As most of you already know, over the long-term, stocks outperform all asset classes and smaller companies give the absolute highest returns.
Tomorrow we will look at small caps vs. large caps in more detail…
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[...] of all, since stocks outperform all other asset classes over the long-term (see post & graphs: here), we would aim to have a majority of the portfolio in stocks and would therefore opt for a 60/40 [...]