Cedar Financial Advisors-News and Views

The 2008 Callan Periodic Table of Investment Returns was recently published, and I have updated the website to include it.  The link to the Periodic Table is here.  It’s not a pretty picture.

All of the equity asset classes had significant negative returns.    The S&P 500 lost 37%; the worst year since its creation in 1957.  Prior to 2008 the biggest annual loss was 30% in 1974.  The only asset class with a positive return was the Barclays Capital Aggregate Bond Index.  The bond index name itself was a casualty – formerly known as the Lehman Brothers Aggregate Bond Index. The table is a useful tool to illustrate the benefit of diversification.  However, the 2008 column shows the limits of diversification when the global financial system is in crisis mode.

Tags: Asset Classes