10-Year Performance of Major Asset Classes

Asset Class Performance 2006-2015

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You might be tempted to select your investments by their past performance. If one did well last year, some people think it will do well again this year. But if you use that logic, you won't be happy with the results.

This chart explains why. Each color represents the 16 major asset classes sorted by their return from 2006 to 2015. The best performing asset class is at the top, and the worst is at the bottom. 

As you can see, there is no pattern - only a mosaic of colors. The top performers didn’t do well every year. In fact, many spent several years in the bottom half. If you had picked those, you wouldn’t have gotten the returns you wanted.

In other words, past performance doesn’t guarantee future results. It’s impossible to predict future winners by going with the top asset classes from last year. So what’s the solution?

Make sure your portfolio is properly diversified. Instead of putting your eggs all in one or two baskets, spread them out among many asset classes. If you have questions about how to do this, contact one of our advisors.

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