The chart below shows several issues investors struggle with all the time. It’s difficult to pick the best performing investment year after year, yet for many investors, it’s an annual event. They look for an encore, picking the best asset class last year with the hope of a repeat performance. Yet, betting on last year’s winner rarely works out.
Assets at the top of the chart one year could be at the bottom the next, and vice versa. Much of this is due to reversion to the mean. But over the long-term, those big swings even out. The chart shows annual returns for eight asset classes against a diversified portfolio. Diversification works to smooth out those big swings in the short-term. While you’ll never get the biggest gains of any year, you avoid the huge losses.
The table below ranks the best to worst investment returns by asset class over the past 15 years. Hover over the table to highlight the asset class returns.
Asset Class Returns
| 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | YTD | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| HG Bnd 5.2% |
EM 79.0% |
REIT 28.0% |
REIT 8.3% |
REIT 19.7% |
Sm Cap 38.8% |
REIT 28.0% |
REIT 2.8% |
Sm Cap 21.3% |
EM 37.8% |
Cash 1.8% |
Lg Cap 31.5% |
Sm Cap 20.0% |
REIT 41.3% |
Cash 1.6% |
Lg Cap 16.9% |
|
| Cash 1.7% |
HY Bnd 57.5% |
Sm Cap 26.9% |
HG Bnd 7.8% |
EM 18.6% |
Lg Cap 32.4% |
Lg Cap 13.7% |
Lg Cap 1.4% |
HY Bnd 17.5% |
Int’l 25.6% |
HG Bnd 0.0% |
REIT 28.7% |
EM 18.7% |
Lg Cap 28.7% |
HY Bnd -11.2% |
Int’l Stk 12.1% |
|
| AA -22.4% |
Int’l Stk 32.5% |
EM 19.2% |
HY Bnd 4.4% |
Int’l Stk 17.9% |
Int’l Stk 23.3% |
AA 6.9% |
HG Bnd 0.6% |
Lg Cap 12.0% |
Lg Cap 21.8% |
HY Bnd -2.3% |
Sm Cap 25.5% |
Lg Cap 18.4% |
Sm Cap 14.8% |
HG Bnd -13.0% |
Sm Cap 8.1% |
|
| HY Bnd -26.4% |
REIT 28.0% |
HY Bnd 15.2% |
Lg Cap 2.1% |
Sm Cap 16.4% |
AA 11.5% |
HG Bnd 6.0% |
Cash 0.0% |
EM 11.6% |
Sm Cap 14.7% |
REIT -4.0% |
Int’l Stk 22.7% |
AA 9.8% |
Int’l Stk 11.8% |
Int’l Stk -14.0% |
AA 6.8% |
|
| Sm Cap -33.8% |
Sm Cap 27.2% |
Lg Cap 15.1% |
AA 0.3% |
Lg Cap 16.0% |
HY Bnd 7.4% |
Sm Cap 4.9% |
Int’l Stk -0.4% |
REIT 8.6% |
AA 14.6% |
Lg Cap -4.4% |
AA 18.9% |
Int’l Stk 8.3% |
AA 10.9% |
AA -16.5% |
EM 5.1% |
|
| Lg Cap -37.0% |
Lg Cap 26.5% |
AA 13.5% |
Cash 0.1% |
HY Bnd 15.6% |
REIT 2.9% |
HY Bnd 2.5% |
AA -1.3% |
AA 7.2% |
REIT 8.7% |
AA -5.6% |
EM 18.9% |
HY Bnd 7.5% |
HY Bnd 5.4% |
Lg Cap -18.1% |
HY Bnd 5.1% |
|
| REIT -37.7% |
AA 24.6% |
Int’l Stk 8.2% |
Sm Cap -4.2% |
AA 12.2% |
Cash 0.1% |
Cash 0.0% |
Sm Cap -4.4% |
HG Bnd 2.7% |
HY Bnd 7.5% |
Sm Cap -11.0% |
HY Bnd 14.4% |
HG Bnd 6.1% |
Cash 0.0% |
EM -19.7% |
REIT 3.0% |
|
| Int’l Stk -43.1% |
HG Bnd 5.9% |
HG Bnd 6.5% |
Int’l Stk -11.7% |
HG Bnd 4.2% |
HG Bnd -2.0% |
EM -1.8% |
HY Bnd -4.6% |
Int’l Stk 1.5% |
HG Bnd 3.5% |
Int’l Stk -13.4% |
HG Bnd 8.7% |
Cash 0.6% |
HG Bnd -1.5% |
Sm Cap -20.4% |
Cash 2.3% |
|
| EM -53.2% |
Cash 0.1% |
Cash 0.1% |
EM -18.2% |
Cash 0.1% |
EM -2.3% |
Int’l Stk -4.5% |
EM -14.6% |
Cash 0.3% |
Cash 0.8% |
EM -14.3% |
Cash 2.2% |
REIT -5.1% |
EM -2.2% |
REIT -25.0% |
HG Bnd 2.1% |
| Abbr. | Asset Class – Index | Annual | Best | Worst |
|---|---|---|---|---|
| Lg Cap | Large Cap Stocks – S&P 500 Index | 8.81% | 32.4% | -37.0% |
| Sm Cap | Small Cap Stocks – Russell 2000 Index | 7.16% | 38.8% | -33.8% |
| Int’l Stk | International Developed Stocks – MSCI EAFE Index | 2.29% | 32.5% | -43.1% |
| EM | EM Stocks – MSCI Emerging Markets Index | 0.99% | 79.0% | -53.2% |
| REIT | REITs – FTSE NAREIT All Equity Index | 6.64% | 41.3% | -37.7% |
| HG Bnd | High Grade Bonds – Bloomberg Barclays U.S. Agg Index | 2.57% | 8.7% | -13.01% |
| HY Bnd | High Yield Bonds – ICE BofA US High Yield Index | 6.02% | 57.5% | -26.4% |
| Cash | Cash – S&P U.S. Treasury Bill 0-3 Mth Index | 0.62% | 1.66% | 0.0% |
| AA | Asset Allocation Portfolio* | 4.87% | 24.6% | -22.4% |
*Asset Allocation Portfolio is 15% large cap stocks, 15% international stocks, 10% small cap stocks, 10% emerging market stocks, 10% REITs, 40% high-grade bonds, and annual rebalancing.
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