Investment Returns By Asset Class, 2016 Year-End Review


Although I am not always successful, I’ve been trying to pay less attention to the daily, weekly, even monthly movements of the markets. Once every few months, I will update my portfolio spreadsheet and make sure that I am investing new money towards my target asset allocation, but that’s about it. That said, I do enjoy a good year-end review. Here are the trailing 1-year returns for select asset classes as benchmarked by passive mutual funds and ETFs. Return data was taken from Morningstar after market close 12/30/16.



Commentary. If anything, I think 2016 reminded us that although many people are paid essentially to make predictions, most of them aren’t very good at it. Indeed, the more important skill is explaining why things actually turned out the way they did in hindsight. That way, you have a reason to believe their next prediction…

As 2016 ended, I was a bit surprised to see that every asset class listed above had positive returns. Accordingly, most people who owned a diversified portfolio in 2016 had decent returns. The Vanguard Target Retirement 2045 fund (90% diversified stocks and 10% bonds) was up about 8.9% in 2016. My personal portfolio (overall 70% stocks/30% bonds) was up about 7.8% in 2016.

As I get closer to having to live off of my portfolio, I am increasingly focused on the amount of dividends, interest, and rental distributions that my portfolio gives off. (This is in the low 2% range.) I know that total return is more important, but seeing the cash come in makes me more comfortable. I like the analogy to an investment property. If you get a reliable $2,000 in rent coming in every month like clockwork, you care less about the market value of the house itself.


  1. Hmmm. I checked VTI via Google Finance over the weekend, and I thought it was 10.51%. Looking at a 1yr return now, and it says 10.77%. Where did you get 12.7% from?

  2. Jonathan, how do you calculate your dividends, interest, and rental distributions rate?

  3. I checked Morningstar for VTI, and it says 10.57%, much closer to what I said above with regarding Google Finance.

  4. Vanguard Target Retirement 2015 fund is certainly not “90% diversified stocks and 10% bonds”

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