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Bonds returns are highly correlated with stock returns and gold gets eaten away by inflation. For money you don't need to spend in the next 7 years (so you can
by cheriot 10y ago
Bonds returns are highly correlated with stock returns and gold gets eaten away by inflation. For money you don't need to spend in the next 7 years (so you can wait out a recession) it's hard to beat a stock index.
- EvgeniyZh 10y ago"For example, a “simpleton’s portfolio” consisting of one quarter each U.S. large stocks, U.S. small stocks, foreign stocks, and U.S. high-quality bonds had a higher return, with much lower risk, than large U.S. stocks alone (represented by the S&P 500 index). The S&P 500, in turn, performed better than 75% of professional money managers over the same period." (c) W.J. Bernstein, The Intelligent Asset Allocator, based on a study by T. Rowe Price, from 1973 to 1992. The gold was used as a replacement, because I'm not from US, and it worked well for Russia, giving average yearly 48,9% compared to 24,4%, 31,5%, 28,1% for stocks, bonds and gold for 1997-2009 period.