Sounds great, right? Well, per my blog post last week regarding the Callan Periodic Table of returns, if you were lucky enough over the last 19 years to have guessed correctly which major asset class would be the best performer in each year, +27.4% is the average annual return you would have earned (see table below for the “winner” each year)!
Alternatively, if you were unfortunate enough so as to pick the worst performer, your average annual return would be a miserable -8.88% over the past 19 years. Finally, to balance things out, if you picked the major asset class that was in the “middle of the pack”, your average annual return would have been +5.89%.
There is nothing magical about these numbers and no one should strive to try to pick the “annual winner” ahead of time (since it is impossible to do, except by pure luck!). Again, as always, it is best to have a diversified investment strategy that is consistent with your goals and stick to it!