Here is 8 page article related to asset allocation. I like to read the article and spend 30 minutes first.
Until 2008, the worst-case scenarios shown in this table came from the
bear markets of 1973-74 and 2000-2002. Now, most of the worst periods involve 2008 and early 2009.
The U.S. stock market, measured by the Standard & Poor’s 500 Index, suffered a decline of 37 percent
in 2008, the worst calendar year since 1931 (when it lost 43.3 percent).
Over 30 years, an investment of $1,000
would grow to $32,342 at the 12.4 return, vs. only
$16,980 at 9.9 percent.
They include a
worst-calendar-year loss of 41.6 percent in 2008
and a worst-12-months loss of 51.1 percent (March
2008 through February 2009). There was also a
one-month loss of 23.4 percent! Not many investors can be sure they’ll keep their cool in the face
of losses like that.
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