The Historical Results section provides a visual representation of how your Current Allocation and Target Allocation would have performed since 1994, on an inflation adjusted basis. Both portfolios are rebalanced annually. We use your current portfolio value as a hypothetical starting point.
Historical analysis provides an objective view of how any given asset allocation would have performed, but it is important to consider that future returns and correlations between asset classes will vary. This time period is somewhat unique in that stocks were particularly volatile and bonds performed particularly well as interest rates were in a secular decline. Still, we believe the historical analysis is a useful demonstration of how different risk profiles can impact your growth and risk over time.
Data sources: Ibbotson Associates, MSCI, Standard & Poor’s, World Gold Council, BP.com, US Energy Information Administration, Robert Shiller Online, MIT Center For Real Estate, Yahoo Finance. Calculations are based on the long-term historical performance of asset classes using a combination of indexes and ETFs as proxies: S&P 500, MSCI EAFE and MSCI ACWI ex-US, 10 Year U.S. Treasuries, S&P/Citigroup International Treasury Bond Ex-US, 30 Day T-Bills, as well as IEF, IGOV, VNQ, IAU, and DBC. Prior to 2007, the Alternative asset class is represented by a hypothetical index of 50% real estate and a 50% gold/oil combination. Each year thereafter it is comprised of 50% real estate and a 50% blend of diversified commodities and gold ETFs. Portfolio standard deviation, correlation, and expected returns are based on average annual performance included in source data: domestic equities since 1926, international equities since 1970, domestic fixed since 1926, international fixed since 2002, alternatives since 1970 and cash since 1926.