Stocks Vs Bonds Historical Returns Chart, Why The Stocks To Bonds Ratio Is Important Into 2015 See It Market

As of market close on august 17 th 2020 the sp 500 was up 468 year to date total return and bloomberg barclays us.

Covid vaccine australia. Historical returns of stocks and bonds during election years. By learning about returns of bonds vs stocks for the last 30 years or so youll have a barometer for the range of stock and bond returns. Take a look at the 20 year total return of the vanguard long term bond index fund vbltx versus the sp 500 index etf spy.

Going back to 1928 these graphs give some historical context for the age old conversation of investing in stocks versus treasury bonds. The long term rate of return for bonds vs stocks. A 0 weighting in stocks and a 100 weighting in bonds has provided an average annual return of 54 beating inflation by roughly 34 a year and twice the current risk free rate of return.

The next chart shows rolling 10 year returns from 1938 2019 for the performance of stocks versus bonds. Below is an example of various bond performance during the height of he volatility in 2020. 100 invested in stocks in 1928 would have grown to 25555331 by the end of 2013 while 100 in t bills and t bonds would have grown to 197272 and 692579 respectively.

To compare stock versus bond returns data for the long term is the best yardstick. Historical returns of different stock and bond portfolio weightings income based portfolios. Then integrate the reversion to the mean theory economic news the fed and world events into your stock and bond market analysis.

In 14 years your retirement portfolio will have doubled. Vbltx is considered a proxy for the entire us bond market. For many decades investors have relied on the belief that over the long term stocks will virtually always provide a higher return than bonds.

Obviously none of us will be investing for 90 years but the graph also shows how quickly the returns of stocks and bonds can diverge. An introductory graph showing the cumulative returns since 1927 of investing 100 into either the sp 500 10yr treasury bond or both 5050 weightingplease note that the scale of the graph is logarithmic. Stocks averaged an annual return of 1150 in the period from 1928 2013 while t bills and t bonds averaged 357 and 521 respectively.

The lower volatility of bonds is also apparent in the chart because the line for bonds is much less choppy than the line for stocks. From 1926 through 2009 stocks produced an annual average return of 118 percent.