If you can take it, here is some more humbling food for thought. Here is a comparison of the growth of $10,000 invested in either the Total US stock, Total International Stock, or Total US bond index fund from the beginning of this century (1/1/2000) until the end of last week. The story is the same if you compare the S&P 500 and the US Aggregate Bond Index total returns. Via Allan Roth and the WSJ article Bonds Are Now Outperforming Stocks in Battle for Returns This Century.

These types of charts will always look rather different depending on the start date chosen. 1/1/2000 happens to be a nice round start date (and also happens to be the year I graduated college). Given the market swings these days, it may look very different again soon.

Still, who could have predicted in January 2000 that bonds would have outperformed US stocks (barely) and International stocks (by a lot) after 20 years? We do the best we can with the historical data that we have, but we should remember how much remains out of our control.

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US Stocks vs. International Stocks vs. US Bond Index Returns Since 2000 from My Money Blog.


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