In this article Paul Merriman offers up his thoughts on the subject of how much risk investors should take with their portfolio. One of the links within the article opens a chart that reflects the annual return of differenet asset allocation models by year and over time. An asset mix of 50% bonds and 50% stocks offered up an average annualized return of about eight and one half percent over an extended period of time.
The study used the S&P 500 Index to represent stocks and intermediate term US Treasuries to represent bonds.
https://www.marketwatch.com/story/how-much-investment-risk-should-you-take-2019-04-03/printEnjoy the article.
Old_Skeet
Comments
Derf
Perhaps, the class needed another lecture on the subject and there just might be some that simply missed its first posting as I did. Often times, a professor will offer the same lecture more than once. And, besides @hank, @Old_Joe and @MikeM had a great discussion and exchange going between themselves on this very subject; but, under another thread topic.
For me, what is important about this study, with me being in retirement, is that it reflects that a 50/50 portfolio can substain a 4% withdrawal rate and grow principal over time as the 50/50 portfolio averaged an 8.5% return over time. I'm thinking, the 4% withdrawal rate would have to be computed on the portfolio's average value. This is why I set my own withdrawal rate to generally not exceed a sum of what one-half of my five year average return has been. I found in doing this about twenty years ago when I governed my parents portfolio's provided them ample income plus grew their principal. Now, I have adopted this very same distribution withdrawal method.
Sorry @Ted. My bad. I simply missed it's first posting.
Skeet