A closer look at asset class performance differences

The last ten years may not represent what we will see in the future. In fact, a close look at performance suggests that you are hard pressed to say what will be the most successful asset class over the next three years. Diversification rules. However, we can make some generalization such as bonds are not the best place to put your money if you are looking for long-term appreciation. Commodities in a low inflation low growth environment is a bad bet. Large cap allocations may be a long-term core for any portfolio.

Nevertheless, the key take-away from looking at this table is to focus on diversification and portfolio structure and not trying to pick the next winner. Tilts in allocation could be made but you have to careful of any strategy that puts you all in any asset class.