2023 Year-End Review: Annual Broad Asset Class & Target Fund Returns

Happy New Year! 🎉 🥳 It’s time to take a look back and see how the year went for the broad asset classes that I track. Per Morningstar, here are the total annual returns (includes price appreciation and dividends/interest) for select asset classes as benchmarked by popular ETFs after market close 12/29/23.

The “set and forget” Vanguard Target Retirement 2055 fund (VFFVX) , currently consisting of roughly 90% diversified stocks and 10% bonds, was up 20.2% in 2023, almost but not quite overcoming the drop in 2022.

Commentary. Historically, the S&P 500 annual return is negative in roughly every 1 in 4 years. In 2020 and 2021 nearly everything went up, while in 2022 nearly everything went down.

Even as of late October, it wasn’t clear if 2023 would end with positive returns:

For most of us, the best we can do is to “stay the course” and enjoy the up years while knowing that the down years will inevitably be sprinkled in there. I try my best not to listen to predictions, or even listen to daily market close announcements. If you stand by the roulette table and stare long enough at the red and black numbers that come up, your mind will start to find patterns where they don’t exist.

Instead, I prefer to dig around for these “long view” numbers. For example, if you had been a steady investor in the popular Vanguard Target Retirement 2055 fund over the past several years, your cumulative returns have been solid despite the many problems of the world: