Periodic table of annual returns

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From year to year, there’s no telling which asset classes will be the best performers in the following years, which is a strong argument for portfolio diversification.[1] The periodic table of annual returns, patterned after Mendeleev's periodic table of the elements, shows this concept graphically.

Periodic table

Refer to the table below. This table represents the annual total returns (income plus price changes) in terms of Canadian dollars for a variety of asset classes over the past ten years. The foreign asset class returns are adjusted for year-end to year-end foreign exchange fluctuations to put them in Canadian dollar terms.

Periodic Table of Annual Returns for Canadians[2]
Periodic-table-of-annual-returns-for-Canadians.jpg

Asset classes represented

The following table provides a legend for terms represented above, including links to the underlying index provider (if available).

Text Represents
RRB Real return bonds
S&P500 S&P 500® - S&P Dow Jones Indices
L. Bond Canada Long Term Bond Index - FTSE TMX Canada Indices
S. Bond Canada Short Term Bond Index - FTSE TMX Canada Indices
TSX S&P/TSX Composite (CAD) - S&P Dow Jones Indices
Wilshire Wilshire 5000 Total Market Index - Wilshire Associates
All Bond Canada Universe Bond Index - FTSE TMX Canada Indices
US Bond Barclays US Aggregate Bond Index
Gold Gold bullion
Emerging MSCI Emerging Markets Indexes
EAFE MSCI EAFE Index - Developed Markets
T-Bill 3 month Treasury Bills (T-Bill)

Interpreting the table

At a glance, one can see how the returns vary from year-to-year. For example, the Wilshire 5000 Total Market Index measures performance of all U.S. equity securities with readily available price data. Canadians may be more familiar with the S&P 500, also shown in the table.

Starting at the left side, take a look at how a couple of asset classes performed, represented by the Wilshire 5000 and the S&P/TSX Composite.

Unpredictability in ranking of two indexes
Year Wilshire 5000 S&P/TSX Composite
2012 3 5
2013 1 4
2014 2 6
2015 3 12
2016 2 1
2017 4 5
2018 4 12
2019 2 3
2020 2 9
2021 3 2
2022 9 4

This unpredictability demonstrates the variation of year-to-year investor returns. Holding a diversified portfolio (one which contains several asset classes) will help minimize the variation.

See also

References

  1. ^ The Importance of Diversification
  2. ^ Based on data from Libra Investment Management, which is Copyright © Libra Investment Management Inc. 2005-2023. All rights reserved.

Further reading

External links