Capital Markets: Observations & Insights

​ Performance

Risk Relative to Time Horizon

• Equity returns look much less volatile over a longer time period than shorter time periods

‒ Using 20-year rolling annualized returns, the minimum equity return has been higher than that of bonds while the standard deviation for equities is less than 1% higher

60

Stocks

Range of Stock and Bond Total Returns

52.3%

Bonds

50

40

29.1%

28.6%

30

19.2%

17.9%

17.0%

20

13.1%

10.0%

10

6.5%

0

2.4%

Annual Total Returns

1.3%

0.9%

-1.4%

-2.4%

-5.1%

-10

-20

-30

-40

-37.0%

1-Year

5-Year Rolling

10-Year Rolling

20-Year Rolling

Source: Morningstar. Stock data is the S&P 500 total return and bond data is the Ibbotson Associates US IT Govt total return. Data spans 1950-2017 on an annual basis.

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