6 Graphs & a Table Report on: Asset Classes and Target Date Fund Performance in 2020, Plus US Stocks & Bonds in The Past 95 Years, from 1926-2020

Below are investment performance results for the year 2020 and the updated results for 95 years (1926-2020):

  1. All asset classes except commodities and real estate earned positive returns in 2020. Gold led with a 25% return
  2. Target date funds with long horizons and moderate risk earned double-digit returns in 2020.
  3. Stocks, measured by the S&P 500, returned 18.35% in 2020. Bonds earned 7.44% based on the U.S. Investment Grade (Bloomberg) Aggregate index. Both are greater than their 95-year averages.
  4. The 2020 returns on stocks and bonds are at their modes (most frequent returns).
  5. Stocks have had their third-best decade of returns.
  6. On a reward-risk basis, stocks have had their second-best decade and bonds have had their third best, but the best of the past seven.  
  7. Details are provided in a table.

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1. All asset classes except commodities and real estate earned positive returns in 2020. Gold led with a 25% return.

Both fear (flight to gold) and greed (loading up on stocks) were simultaneously in play.

 

2. Target-date funds with long horizons and moderate risk earned double-digit returns in 2020.

Please see Target Date Fund Benchmarks. Risk was rewarded for those with short horizons, but not long horizons.

 

3. Stocks, measured by the S&P 500, returned 18.35% in 2020, and bonds earned 7.44%. Both are above their 95-year averages

A good year, especially for US stocks.

 

4. The 2020 returns on stocks and bonds are at their modes (most frequent returns).



5. Stocks have had their third-best decade of returns


A good decade follows a disappointing decade. What’s next?

 

6. On a reward-risk basis, stocks had their second-best decade. Bonds had their third best, but the best of the past seven.  


Risk was rewarded in both stocks and bonds.

 

7. Details are provided in the following table.

 

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