Interactive risk versus reward illustration
Here’s one neat interactive risk versus reward illustration from IFA. The tool shows the annualized return versus the standard deviation (risk), for the years 1941 to 2005 and for various portfolios, ranging from the conservative 5% equity to very aggressive 100% equity allocation.
My 70% equity, 30% fixed income portfolio has an annualized return of 12.94% and standard deviation of 12.27%. It is interesting to note that based on historical performance, the emerging market value (EV) asset class has the highest return at 19.64% annualized return. However, I am not aware of any retail mutual index fund or ETF that invests solely in emerging market value equities.
Stumble it!
