Is this time different for the 60/40 portfolio?
We should actually anchor our expectations on the longer-term historical evidence
Add BT as a preferred source
THE 60/40 portfolio (60 per cent global equities, 40 per cent global bonds) has delivered 8 per cent in annual returns over the past decade.
The average return in the past five years was 7.4 per cent. The 10-year, 15-year and 35-year periods gravitate towards the 7 per cent mark, sometimes rising to 8 per cent or falling closer to 6 per cent.
In the past 35 years, the 60/40 portfolio is up 833 per cent. Those are some pretty impressive numbers and seem to go against most people’s expectations.
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