Investment Returns of Different Asset Classes Vary Greatly Over Time

Callan Periodic Table of Investment returns

The Periodic Table of Investment Returns (above) produced by Callan Associates conveys an enormous amount of information. Above all, the table shows that the case for diversification, across investment styles (growth vs. value), capitalization (large vs. small) and equity markets (U.S. vs. international) is strong.

While past performance is no indication of the future, consider the following observations: This analysis assumes that market indices are reasonable representations of the asset classes and depict the returns an investor could expect from exposure to these styles of investment. In fact, investment manager performance relative to the different asset class indices has varied widely across the asset classes during the past 20 years.

(More information on Callan Associates is available on their web site at

Indices of 4 asset classes compared over a 3-year period
The chart above shows a three-year period from March 2002 to March 2004. The performance of indexes of four assets classes are shown. Like the Callan table, this chart further illustrates the need for and benefit of diversification, across asset classes, investment styles, market cap, and markets.

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