Callan Periodic Table of Investment Returns 2019

One of the harder things about investing is buying an investment that has been performing poorly. How many people are getting media attention for pushing the idea of diversification in international stocks right now? None. I mean, some folks are talking about it, but nobody is getting any media attention. It’s not “trending” because nobody’s interested. US stocks have been smoking European and Japanese stocks for a while.

Even if something is a good long-term investment, the short-term ride can be very bumpy. Callan Associates updates a “periodic table” annually with the relative performance of 8 major asset classes over the last 20 years. You can find the most recent one at their website Callan.com. The best performing asset class is listed at the top, and it sorts downward until you have the worst performing asset. Here is the most recent snapshot of 1999-2018:

The Callan Periodic Table of Investment Returns conveys the strong case for diversification across asset classes (stocks vs. bonds), investment styles (growth vs. value), capitalizations (large vs. small), and equity markets (U.S. vs. non-U.S.). The Table highlights the uncertainty inherent in all capital markets. Rankings change every year. Also noteworthy is the difference between absolute and relative performance, as returns for the top-performing asset class span a wide range over the past 20 years.

I find it easiest to focus on a specific Asset Class (Color) and then visually noting how its relative performance bounces around. In last year’s update, I noted that Emerging Markets (Orange) and MSCI World ex-US (Light Grey) had bounced back to the top. Of course, by the time 2018 ended, they were right back to the bottom again.

(Dilbert comic source)