Investing - Theory, News & General • Can you do better than BND, Part 2: Test across bear and bull markets

We have 96 years of data (1928-2023) on U.S. Treasury securities, and 5 year Treasuries have produced an annualized total return that is about 25 basis points higher than the annualized return of 10 year Treasuries.

Okay, but how does each perform as a diversifier when paired with stocks?

Interesting question (VERY interesting, actually). Using 60% equity 40% ten year Treasury portfolios the equity and 10 year Treasury portfolio OUTperforms an equity and 5 year Treasury portfolio by about 95 basis points per year for the last 96 years. The standard deviation of return is 16.3 for the equity/10 year Treasury portfolio vs. only 11.7 for the equity/5 year Treasury portfolio.

Statistics: Posted by dkturner — Tue Dec 10, 2024 10:42 am — Replies 168 — Views 33323

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