Consolidated Returns as of 30 November 2024
Managing the Stocks/Bonds 60/40 Portfolio with a yearly rebalancing, you would have obtained a 10.95% compound annual return in the last 30 Years.
With a quarterly rebalancing, over the same period, the return would have been 8.66%.
How do returns and drawdowns change, implementing different rebalancing strategies?
Rebalancing Strategies
In order to keep risk under control, you should rebalance assets quotes from time to time, so to keep them at the original percentage of the asset allocation.
At fixed time intervals:
- Yearly: Jan 1st
- Half Yearly: Jan 1st, Jul 1st
- Quarterly: Jan 1st, Apr 1st, Jul 1st, Oct 1st
Portfolio Returns as of Nov 30, 2024
Implementing different rebalancing strategies, the Stocks/Bonds 60/40 Portfolio guaranteed the following returns.
Portfolio returns are calculated in USD, assuming:
- No fees or capital gain taxes
- the reinvestment of dividends, if existing
| Return (%) and number of rebalances as of Nov 30, 2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Rebalancing Strategy | 1Y | 5Y | 10Y | 30Y |
MAX (~154Y) |
|||||
| No Rebalancing | 34.43 | (0) | 15.15 | (0) | 12.83 | (0) | 10.95 | (0) | 8.87 | (0) |
| Yearly Rebalancing | 23.36 | (1) | 9.25 | (5) | 8.45 | (10) | 8.78 | (30) | 7.73 | (154) |
| Half Yearly Rebalancing | 22.99 | (2) | 9.22 | (10) | 8.43 | (20) | 8.66 | (60) | 7.74 | (308) |
| Quarterly Rebalancing | 22.88 | (4) | 9.31 | (20) | 8.50 | (40) | 8.75 | (120) | 7.75 | (616) |
| 5% Tolerance per asset | 23.61 | (0) | 9.29 | (2) | 8.51 | (4) | 8.80 | (19) | 7.74 | (90) |
| 10% Tolerance per asset | 24.01 | (1) | 9.64 | (2) | 8.74 | (2) | 8.99 | (8) | 7.83 | (30) |
In order to have complete information about the portfolio, please refer to the Stocks/Bonds 60/40 Portfolio: ETF allocation and returns page.
Performances as of Nov 30, 2024
Historical returns and stats of Stocks/Bonds 60/40 Portfolio, after implementing different rebalancing strategies.
|
Standard Deviation
|
Max Drawdown (%)
|
|||||
|---|---|---|---|---|---|---|
| Rebalancing Strategy | Return % | Std Dev(%) | Ret. / Std Dev | MaxDD(%) | Ret. / MaxDD | |
| No Rebalancing | 8.87 | (0) | 15.02 | 0.59 | -80.46 | 0.11 |
| Yearly Rebalancing | 7.73 | (154) | 10.20 | 0.76 | -62.03 | 0.12 |
| Half Yearly Rebalancing | 7.74 | (308) | 10.34 | 0.75 | -61.92 | 0.12 |
| Quarterly Rebalancing | 7.75 | (616) | 10.38 | 0.75 | -62.39 | 0.12 |
| 5% Tolerance per asset | 7.74 | (90) | 10.40 | 0.74 | -63.77 | 0.12 |
| 10% Tolerance per asset | 7.83 | (30) | 10.56 | 0.74 | -63.33 | 0.12 |
Drawdowns as of Nov 30, 2024
Historical Drawdowns of Stocks/Bonds 60/40 Portfolio, after implementing different rebalancing strategies.
|
Rebalancing
|
Tolerance per asset
|
||||
|---|---|---|---|---|---|
| No Rebalancing | Yearly | Half Yearly | Quarterly | 5% | 10% |
|
-80.46
Sep 1929 - Nov 1944
|
-62.03
Sep 1929 - Jul 1936
|
-61.92
Sep 1929 - Jan 1936
|
-62.39
Sep 1929 - Dec 1935
|
-63.77
Sep 1929 - Mar 1936
|
-63.33
Sep 1929 - Jun 1936
|
|
-50.70
Nov 2007 - Feb 2012
|
-31.73
Mar 1937 - Jan 1943
|
-32.21
Mar 1937 - Jan 1943
|
-32.54
Mar 1937 - Jan 1943
|
-32.41
Mar 1937 - Jan 1943
|
-32.60
Nov 2007 - Oct 2010
|
|
-45.55
Jan 1973 - Dec 1976
|
-30.55
Nov 2007 - Oct 2010
|
-31.30
Nov 2007 - Oct 2010
|
-31.82
Nov 2007 - Oct 2010
|
-31.92
Nov 2007 - Dec 2010
|
-32.08
Mar 1937 - Dec 1942
|
|
-43.82
Sep 2000 - Mar 2006
|
-27.28
Jan 1973 - Jan 1976
|
-28.10
Jan 1973 - Jan 1976
|
-28.11
Jan 1973 - Jan 1976
|
-28.42
Jan 1973 - Jan 1976
|
-29.53
Jan 1973 - Jan 1976
|
|
-29.88
Dec 1968 - Mar 1971
|
-21.56
Sep 2000 - Jan 2004
|
-22.57
Sep 2000 - Feb 2004
|
-21.94
Sep 2000 - Jan 2004
|
-22.23
Sep 2000 - Jan 2004
|
-21.63
Sep 2000 - Feb 2004
|
| 5 Worst Drawdowns - Average | |||||
| -50.08 | -34.63 | -35.22 | -35.36 | -35.75 | -35.83 |
| 10 Worst Drawdowns - Average | |||||
| -37.40 | -26.86 | -27.08 | -27.16 | -27.47 | -27.84 |
For a deeper insight, please refer to the Stocks/Bonds 60/40 Portfolio: ETF allocation and returns page.
