Young Research & Publishing Inc.

Investment Research Since 1978

Disclosure

  • About Us
    • Contributors
    • Archives
    • The Final Richard C. Young’s Intelligence Report
    • You’ve Read The Last Issue of Intelligence Report, Now What?
    • Dick Young’s Research Key: Anecdotal Evidence Gathering
    • Crisis at Vanguard
  • Investment Analysis
    • Bonds
    • Currencies and Gold
    • Dividend Investing
    • ETFs & Funds
    • Investment Strategy
    • Retirement Investing
    • Stocks
    • The Efficient Frontier
  • Investment Counsel
  • Dynamic Maximizers®
  • Retirement Compounders®
  • Free Email Signup

Which Portfolio Would You Rather Own?

November 10, 2010 By Dick Young

Balanced Portfolio vs S&P 500

Given a choice, most investors would rather own the portfolio represented by the blue line in my chart. But in reality, many own something closer to the portfolio represented by the black line. The black line tracks the performance of the S&P 500. The blue line tracks the performance of a balanced portfolio. The balanced portfolio is invested 30% in corporate bonds, 30% in intermediate-term treasuries, 30% in equities, and 5% each in gold and the Swiss franc. The balanced portfolio is also rebalanced annually.

Over the last decade, my balanced portfolio earned a compound annual return of 8.07%, compared to a compound annual loss of 0.95% on the S&P 500. And the higher-returning balanced portfolio was much less risky than the S&P 500. The standard deviation of my balanced portfolio was only 5.5%, compared to 21.1% for the S&P 500—that’s three times the risk for a negative return. Sound like a compelling opportunity to you?

The S&P also had more down years than my balanced portfolio. The index was down four out of the last ten years. In down years, the average loss was 20%. My balanced portfolio had one down year, and the loss was only 2.63%. The contrast between the two portfolios is stark. The balanced portfolio is the hands-down winner in terms of return and risk. Of course, over many decades one should expect a buy-and-hold equity-only portfolio to outperform a balanced portfolio, but for conservative investors, and those in or nearing retirement, the added volatility is often not worth the prospect of additional return. I invest with a balanced approach and advise the same for you.

Share this:

  • Email
  • Twitter
  • Facebook

You Might Also Like:

  • Is Your Portfolio Balanced Like a Harley?
  • The Power of Diversification
  • Portfolio Strategy: Watch the Divergences
  • Author
  • Recent Posts
Dick Young
Richard C. Young is the editor of Young's World Money Forecast, and a contributing editor to both Richardcyoung.com and Youngresearch.com.
Latest posts by Dick Young (see all)
  • Now Is the Right Time to Make Dividends Your Ally - October 9, 2020
  • Stock Market Investing for a Secure Retirement - September 25, 2020
  • Strong Performance for Shippers as Economy Finds its New Balance - September 16, 2020

Search Young Research

Most Popular

  • Do You Remember When NASDAQ Dropped by 82%?
  • Vanguard Wellesley (VWINX) vs. Wellington (VWELX): Which Fund is Best?
  • Gavekal Chairman: Renewables Bubble is "Stupidest" Ever
  • Don’t Be on Their Radar, Get Out of Debt Now
  • Democrats Eager to Get Back to Protecting the Rich by Ending SALT Deduction Cap
  • Stocks: Are You Sticking Your Neck Out Too Far?
  • The Power of a Compound Interest Table
  • H2O, Skiing, Hiding A$$ET$, Bitcoin, Ammo & More
  • There's Always a Way Forward for Americans Like YOU
  • Overtaken By Nvidia, Intel Fires Bob Swan

Don’t Miss

Default Risk Among the Many Concerns with Annuities

Risk and Reward: An Efficient Frontier

How to be a Billionaire: Proven Strategies from the Titans of Wealth

Could this Be the Vanguard GNMA Winning Edge?

Cryptocosm and Life After Google

Warning: Avoid Mutual Fund Year End Distributions

Is Gold a Good Long-term Investment?

How to Invest in Gold

Vanguard Wellington (VWELX): The Original Balanced Fund

What is the Best Gold ETF for Investing and Trading?

Procter & Gamble (PG) Stock: The Only True Dividend King

The Dividend King of the North

You’ll Love This if You’re Dreaming of an Active Retirement Life

RSS The Latest at Richardcyoung.com

  • Insurrection Was the Furthest Thing from Trump’s Mind
  • Who Are Those Urging Violence?
  • An Alert for Warm Weather, Wine Loving Mavens.
  • Key West’s Number One Restaurant: The Thirsty Mermaid
  • VIDEO: Henry U.S. Survival AR-7
  • Cancel Culture, the Great Purge, Double Standards
  • How Are You Doing on a Local Level?
  • We Support Censure of Flake, McCain and Ducey
  • Zinc: The Gatekeeper of Immune Surveillance.
  • Love at First Shot: Daria Bruno Featured on NRA Show

About Us

  • About Young Research
  • Archives
  • Contributors

Our Partners

  • Richard C. Young & Co.
  • Richardcyoung.com

Social Media

  • Facebook
  • Twitter
  • Youtube
  • Pinterest

Copyright © 2021 | Terms & Conditions

loading Cancel
Post was not sent - check your email addresses!
Email check failed, please try again
Sorry, your blog cannot share posts by email.