Asset Class Performance

I found this chart to be absolutely fascinating . . . 


Graphic courtesy of Barrons

There will be an eventual reversion to the mean — and that means Commodities and Real Estate will correct, and Stocks will rally.

But the key word is eventual. One needs to consider much longer term charts, and watch interest rates to know approximately when.

My guess (and its only a guess) is that stocks become very buyable in 2007/08, while Real Estate purchasers — at least those buying with cash — maybe a short time after . . .


The Bionic Recovery
Interview with Jim Paulsen, Chief Investment Strategist, Wells Capital Management
Barron’s MONDAY, OCTOBER 17, 2005

What's been said:

Discussions found on the web:
  1. Mike N. commented on Oct 22

    Speaking of interesting charts, I just noticed this one on the Vanguard Group website:


    It shows the “market value of equities as a percentage of GDP” for the US over the last 80 years. Currently it’s 152%, but the average value is 65%. Doesn’t exactly give me a warm fuzzy feeling!

  2. guerby commented on Oct 22

    Mike: if US firms have globilized, US only GDP might not be a “good” divisor for US equity values any more.

  3. Spencer T. W. commented on Oct 22

    Barry, could you give us an update on your outlook for the equity markets?

    I know earlier you were calling for a Nov/Dec rally, followed by a very tough period for equities in 2006.

    Has this changed in any way? There seems to have been a shift in the market with the Fed jawboning inflation and the past years’ leaders (oil & homebuilders) having broken momentum.

  4. Londoner commented on Oct 24

    It’s a very “selective” time period for the chart… it rebases to zero at the very top of the bubble market. On the whole, I’d rather be long equity than short at the moment, but I suspect it could take a VERY long time to revert to the mean, if we take the millenial equity market euphoria as being a mean.

  5. df commented on Oct 30

    I believe all will fall, while bonds will soar. special thands to debt deflation depression

  6. Investing Intelligently commented on Nov 30

    Doom and Gloom

    There is an interesting chart here, Asset Class Performance (got the link from here) showing the performance of various asset classes since 2000 and giving several predictions. One comment said: I believe all will fall, while bond…

  7. swetha commented on Oct 19


    can u give me the update of this chart uptil sep or oct 06 along with a few line explanantion

Posted Under