Historical Returns

Novel Investor has created a couple charts comparing asset class returns and sector returns in the U.S. and throughout the world. These charts demonstrate the importance of diversification among asset classes and diversification within asset classes.

In managing my portfolio, I try to maintain exposure to stocks, bonds, and real estate investment trusts (REITs) in domestic and international markets, including both developed and emerging markets on various continents. I also diversify by sector, market capitalization, and style classifications.

This means that my stock portfolio includes large-, mid-, and small-cap companies from throughout the world. It includes low volatility and high volatility companies, value-style and growth-style companies, and companies in every sector of the economy and as many industries as possible within each sector.

My bond portfolio includes high grade bonds and high-yield bonds of varying maturities in the  government, municipal, and corporate sectors domestically and internationally.

My REIT allocations include equity and mortgage REITs in the residential, commercial/industrial, health, and hospitality industries.

Take a look at how these various sections of the world economy have performed over the last 13 years:

Novel Investor Asset Class Returns TableSource: Novel Investor

Novel Investor Sector Returns TableSource: Novel Investor

Novel Investor International Markets Returns TableSource: Novel Investor

Novel Investor Asset Class Returns TableSource: NovelInvestor.com

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