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Is It Time to Rethink Your Portfolio?
Your investment results depend mostly on how you split your money among
stocks, bonds, and cash. Over the past four decades, the more investors
allocated to stocks, the greater their returns have been but also the greater
the risks they took. If you're feeling bullish, you may want to take advantage
of lower prices now to boost your stock allocation. If you're bearish, you may
want to put more into bonds or, if you'll need the money soon, cash.
% ALLOCATION AVG. ANNUAL BEST/WORST
STRATEGY Stocks/Bonds/Cash RETURN* YR'S RETURN
MOST CONSERVATIVE 25/40/35 7.9% 20.8% /-2.1%
MODERATELY CONSERVATIVE 40/40/20 8.8 22.5 /-7.5
MODERATE 60/30/10 9.8 27.6 /-14.1
MODERATELY AGGRESSIVE 80/20/0 10.8 33.2 /-20.5
MOST AGGRESSIVE 100/0/0 11.6 43.4 /-26.5
BEST/WORST NUMBER OF
STRATEGY ANNUALIZED RETURN** DOWN YRS
MOST CONSERVATIVE 10.7% / 5.2% 3
MODERATELY CONSERVATIVE 12.2 / 5.7 8
MODERATE 13.8 / 6.1 8
MODERATELY AGGRESSIVE 15.4 / 6.4 9
MOST AGGRESSIVE 16.7 / 6.5 9
* Results for 1956 through 1997. Assumes dividend reinvestment and annual
rebalancing
** Over any 20-year period
DATA: T. ROWE PRICE ASSOCIATES, BUSINESS WEEK
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Updated Oct. 29, 1998 by bwwebmaster
Copyright 1998, by The McGraw-Hill Companies Inc. All rights reserved.
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