U.S. stocks have consistently earned more than bonds over the long term, despite regular ups and downs in the market. Take a look at the chart below to see what a $100 would be worth over the history of the stock market (S&P began tracking performance in 1926). During this time, stocks returned an average of almost 10% annually, bonds 5.4%, and short-term investments 3.5%, before inflation. Of course, it wasn’t a constant straight line up for that whole time, but this shows that stocks have historically offered more potential for growth over the long term.
Despite that, most people are still scared from the stock market losing a great investment category to build and accelerate their wealth. For these people who are still reluctant to invest in the stock market, I want to share an extremely safe stock investment strategy developed by Ray Dalio. Ray is the founder of the world’s largest hedge fund, Bridgewater, with $160B Assets Under Management (AUM).
Tony Robbins called Ray’s portfolio allocation strategy ” The All Seasons” strategy as it works well under any market situation. This portfolio provided the following results :
1- 10% annual return tested for 40 years !
2- Only 4 years with loss in the 40 years with an average 1.47%.
3- The worst year , 2008 , this portfolio lost 3.93% vs. S&P 500 loss of 37% !!!
4- It has amazing diversification of stocks , Bonds , Gold and Commodities.
This portfolio has the following allocations:
1- 40% Long term US Bonds
2- 15% Intermediate US Bonds
3- 30% Stocks
4- 7.5% Gold
5- 7.5% Commodities
I wanted to share this very conservative but profitable portfolio to encourage people to start investing the stock market. Avoid procrastination and open your broker account today and start investing ASAP.
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