- Traditional stocks and bonds have delivered very good returns the past decade, however the starting valuations today are very poor.
- The SPDR S&P 500 ETF averaged a 15.3% return on an average annual basis from 2009-2020, however, SPY only returned 1.2% on average annual basis from 2000-2010.
- REITs are not a good alternative because of the terrible starting point for bond yields, raising the prospect of rising long-term interest rates that hurt cap rates.
- An investor has to be very careful in selecting the proper mix of assets in their portfolio to optimize returns and minimize risk.
- Much like the return period from 2000-2010, commodities are positioned to be an effective solution as a portfolio diversifier and a return enhancer.
For further details see:
The Biggest Risk For Pre-Retirement And Retirement Investors Is The Wrong Asset Allocation