Balanced Strategy Performance (as of 9/16/2019)

The chart below compares the performance of our Balanced investment strategy to a typical “buy and hold” portfolio consisting of 60% stocks and 40% bonds. The Balanced strategy has been consistently profitable, with a compound annual growth rate (CAGR) of 10.8%. An initial investment of $1,000 in 1996 would be worth $10,612 today [1].

Strategy: Balanced 60/40 Benchmark [2]
Compound Annual Growth Rate [1] 10.8% 8.1%
Standard Deviation [3] 7.8% 10.4%
Maximum Drawdown [5] -13.9% -30.0%
Sharpe Ratio [4] 0.98 0.51
Growth of $1,000 invested in 1996 $10,612 $5,995

Annual Performance

Year Balanced Strategy 60/40 Benchmark
1997 14.86% 23.37%
1998 8.99% 21.27%
1999 29.33% 11.06%
2000 13.57% -1.12%
2001 2.54% -4.04%
2002 14.46% -7.24%
2003 21.61% 18.40%
2004 11.34% 8.06%
2005 10.31% 3.95%
2006 17.22% 10.52%
2007 13.23% 7.08%
2008 12.81% -15.08%
2009 6.65% 13.18%
2010 15.96% 12.77%
2011 15.68% 7.40%
2012 7.53% 11.06%
2013 6.66% 16.95%
2014 8.04% 11.70%
2015 -5.18% 1.36%
2016 4.79% 7.60%
2017 7.79% 14.04%
2018 -5.07% -2.34%
2019 10.77% 15.98%

Monthly Strategy Performance

Year JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Year
1996 2.2 2.0 4.6 0.6 9.68%
1997 1.3 0.1 -1.2 0.3 4.0 4.0 4.8 -3.7 5.0 -2.2 0.4 1.5 14.86%
1998 0.4 1.6 3.4 0.3 -0.4 0.7 -0.2 -0.1 3.2 -0.9 0.6 -0.0 8.99%
1999 -0.0 -3.5 5.9 5.9 -0.5 3.7 -0.7 2.2 4.1 -3.1 2.6 10.3 29.33%
2000 0.6 3.5 1.1 -1.6 1.2 3.3 -0.2 1.6 -1.3 0.5 2.8 1.6 13.57%
2001 1.3 1.6 -3.2 -0.6 -1.2 3.4 -0.7 2.5 -0.8 2.3 -2.1 0.2 2.54%
2002 1.2 1.4 2.5 0.0 1.7 0.3 -1.1 3.6 2.6 -0.3 1.4 0.4 14.46%
2003 0.4 3.9 -3.8 0.4 5.0 0.7 0.4 2.4 4.8 1.9 1.3 2.6 21.61%
2004 1.8 1.6 1.5 -8.4 1.5 0.3 1.0 2.0 2.2 2.4 2.4 3.1 11.34%
2005 0.8 1.4 -1.7 -0.3 2.4 1.7 2.4 0.2 1.3 -3.9 3.3 2.5 10.31%
2006 5.4 0.4 2.3 2.0 -3.7 -1.6 1.4 1.3 0.1 3.3 3.8 1.6 17.22%
2007 1.8 1.7 0.9 1.3 0.6 -1.9 1.1 -0.2 2.3 3.8 0.1 1.0 13.23%
2008 3.4 3.4 -1.2 -0.3 0.2 2.1 -3.2 -0.3 -1.1 -4.0 7.5 6.2 12.81%
2009 -4.9 -0.2 1.0 0.3 3.4 -1.9 2.8 1.4 2.2 -0.4 6.6 -3.3 6.65%
2010 -2.2 0.9 3.2 2.7 -0.3 1.7 0.7 3.5 2.0 1.6 -1.8 3.3 15.96%
2011 0.6 3.0 0.4 4.0 -1.0 -2.9 2.2 7.5 -0.2 0.2 0.1 1.1 15.68%
2012 1.1 0.5 -0.1 0.9 1.0 1.2 2.4 0.1 -0.6 -0.8 0.2 1.3 7.53%
2013 -0.7 -0.4 1.7 2.5 -3.7 -2.8 3.7 -1.5 2.2 3.2 1.2 1.4 6.66%
2014 -1.7 2.5 -0.7 1.5 2.3 0.1 -0.8 3.5 -3.9 1.9 2.3 0.9 8.04%
2015 7.3 -2.8 -0.6 -0.4 -2.2 -3.8 1.9 -4.7 -0.2 1.2 -0.9 0.3 -5.18%
2016 0.4 3.4 1.2 -0.1 -0.9 4.9 1.0 -1.7 -0.0 -1.9 -3.2 1.8 4.79%
2017 0.4 2.2 -0.5 0.4 1.4 -0.3 1.0 0.9 -0.4 0.8 0.8 0.9 7.79%
2018 3.3 -4.4 -0.9 0.8 1.0 -1.3 -0.4 1.4 0.4 -5.6 0.9 -0.2 -5.07%
2019 2.1 -0.2 2.3 -0.5 2.2 1.9 -0.2 5.5 -2.6 10.77%

Notes

  1. The Balanced strategy was made available to subscribers on 3/31/2013. Performance results before this date represent a hypothetical strategy backtest. Strategy performance is tracked and verified by TimerTrac.com. (Note that Allocations made within the past 3 months are only shown to current subscribers).
  2. The benchmark portfolio is a typical allocation of 60% U.S. stocks and 40% bonds, rebalanced annually.
  3. Standard deviation, also known as historical volatility, is used by investors as a gauge of the amount of expected portfolio volatility. Volatile funds or portfolios have a high standard deviation. When comparing investments, a low standard deviation is preferable.
  4. The Sharpe Ratio measures risk-adjusted performance. It's calculated by subtracting the risk-free interest rate from the rate of return for a specific portfolio, and dividing the result by the standard deviation of the portfolio returns. We use U.S. Treasury Bill returns as our risk-free investment. When comparing portfolios, a high Sharpe Ratio is preferable.
  5. Drawdown: the peak-to-trough decline in investment or portfolio value, measured as a percentage between the peak and the trough. A good investment strategy aims to minimize drawdowns.