This is the third, and last, segment of my 3-part commentary. Part 1 discussed 2015 and the past 5 years. Part 2 looked into the future, identifying momentum and reversal possibilities. Now this commentary looks back over the past 90-year history of capital markets.
The table below shows the history of risk and return for stocks (S&P 500), bonds (Citigroup high grade), T-bills and inflation. There are many lessons in this table, so it’s worth your time and effort to review these results. For example, here are a few of the lessons:
Source: PPCA Inc
Additional perspective is provided by the following histograms of stock and bond returns.
Ronald J. Surz is president of PPCA Inc. and Target Date Solutions in San Clemente, California. He is also a partner and CIO of Paladin Financial Technology, TDF Builder, and Sortino Investment Analytics.