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How Stock/Bond Portfolios have Performed over Time

First, let's put 2022 in context.

As you can see from the chart below, it is rare for stocks and bond values to fall simultaneously. 2022 was a rare exception which has disheartened many investors. That is a shame because 2023 is a buying opportunity for bonds, at the least.

The centre column is the asset allocation between stocks/bonds. The bars are the single best year on the right and the worst on the left. The numbers within the purple bars are the avg annual performance of the asset allocation weighting, e.g. the 60/40 allocation averaged 8.8% per year from 1926-2019. The best year was 36.7%, and the worst was -26.6%.

Stable and potentially declining interest rates make the outlook bright for bonds. Stock prices will benefit too but will face weaker corporate earnings. Nasdaq, Infrastructure, and dividend-paying companies are most likely to benefit from lower interest rates ahead.

The Rigden Financial model portfolio is currently at a 70/30 asset allocation, albeit at least 30% is allocated to companies that pay regular dividends and thus perform more like bonds than other stocks.

Use the link below to schedule an appointment to discuss your options!

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