You Don't Need Perfect Knowledge To Invest Well
If you had the power to predict which one of 12 types of investments representing a wide range of assets was going to be No. 1 every year for each of the 15 years from 2002 through 2016, you would have averaged a 29.9% annual return.
To be clear, to get that 29.9% return every year from 2002 through 2016, you would have had to invest 100% of your portfolio in the No. 1% asset class on January 1 and held it until the end of the year, and then bought the coming year's leader. The yellow boxes highlight the No. 1 asset classes in each of those 15 years. On January 1, 2003, you would have had to choose which one of the 12 types of investments would be No. 1 again, and you would have had to do that annually for 15 years to average a 30% return.
It's obviously totally unrealistic to have expected this. It would take a miracle to pull this off!
© 2018. All Rights Reserved.
- What's Driving Stocks And How It Affects Portfolios
- How Portfolio Theory Worked In Real-World 2017
- Tax Alert: Last Chance For Year-End Tax Planning
- Soaring Stocks Raises Importance Of Diversifying
- Seven Steps To Protect Yourself After Data Breach
- 8 Opportunities To Save Tax Before It's Too Late
- Five Bright Ideas About Year-End Tax Planning
- New Year's Resolution: Review Your Estate Plan
- Countdown To Retirement: Seven Steps To Get Ready
- 5 Estate Planning Steps To Benefit Your Elders
- 17 Year-End Moves That Can Preserve Your Tax Benefits
- Finding The Balance For Retirement Draw-Downs
- Key Components Of A Post-Divorce Estate Plan
- Five Documents At The Core Of An Estate Plan
- 10 Common Questions On Social Security Benefits