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The 20/80 U.S. Stocks/Bonds Portfolio places 20% in U.S. stocks for broad market exposure and 80% in U.S. bonds for greater stability and income. This conservative mix emphasizes risk management while seeking to provide a lower level of growth.
The backtesting period is limited by the inception date of US Total Stock Market (TOTSTOCKMKT.X): Jun 30, 1926.
A quick overview of the assets within the portfolio, its performance and main metrics.
The portfolio consists of 2 asset classes.
| Name / Ticker | Type | Currency | Inception | Weight |
|---|---|---|---|---|
US Total Stock Market TOTSTOCKMKT.X | Asset Class | USD | Jun 30, 1926 | 20% |
Total Bond Market (US Aggregate Bond) TOTBONDMKT.X | Asset Class | USD | Dec 30, 1870 | 80% |
The backtest spans over a period of 98 years. With an annual return of 6.25% for 20/80 US Stocks/Bonds, the cumulative return over that period amounts to 38944%.
| Portfolio Score | 20/80 US Stocks/Bonds |
|---|---|
| Portfolio Score |
| Returns | 20/80 US Stocks/Bonds |
|---|---|
| Month-to-Date | 0.71% |
| Year-to-Date | 6.4% |
| 3M | 0.44% |
| 6M | 5.27% |
| Annualized Return (3Y) | 0.06% |
| Annualized Return (5Y) | 2.95% |
| Annualized Return (10Y) | 3.8% |
| Annualized Return (20Y) | 4.68% |
| Annualized Return (All, 98.4Y) | 6.25% |
| Risk | 20/80 US Stocks/Bonds |
|---|---|
| Annual Volatility | 3.26% |
| Max Drawdown | -19.02% |
| Sharpe Ratio | 1.85 |
| Sortino Ratio | 2.73 |
| Adjusted Sortino Ratio | 1.93 |
With a projected annual return (CAGR) of 6.25% and an initial investment of $10,000, 20/80 US Stocks/Bonds would have the following projected capital growth over the next 50 years.
| Year | Starting Capital | Ending Capital | Total Gain | Avg Monthly Gain | Cumulative Return |
|---|---|---|---|---|---|
| $10,000 | $10,625 | $625 | $52 | 6.3% | |
| 5 | $13,541 | $14,387 | $846 | $71 | 43.9% |
| 10 | $18,335 | $19,481 | $1,146 | $95 | 94.8% |
| 15 | $24,828 | $26,379 | $1,552 | $129 | 164% |
| 20 | $33,619 | $35,720 | $2,101 | $175 | 257% |
| 50 | $207,227 | $220,179 | $12,952 | $1,079 | 2,102% |
A detailed look at the returns of the portfolio.
| Portfolio | All (98.4Y) | 20Y | 10Y | 5Y | 3Y | 1Y |
|---|---|---|---|---|---|---|
| 20/80 US Stocks/Bonds | 6.25% | 4.68% | 3.8% | 2.95% | 0.06% | 11.66% |
| Year | 20/80 US Stocks/Bonds |
|---|---|
| 1926 | 3.75% |
| 1927 | 10.87% |
| 1928 | 7.05% |
| 1929 | 1.17% |
| 1930 | 0.53% |
| 1931 | -10.48% |
| 1932 | 8.03% |
| 1933 | 13.84% |
| 1934 | 6.37% |
| 1935 | 12.39% |
| Portfolio | Positive Years | Negative Years | Positive Ratio | Best Return Years | Worst Return Years |
| 20/80 US Stocks/Bonds | 89 | 10 | 89.90% | 99 | 99 |
Let's analyze how much risk the portfoliohas.
A drawdown represents the period of decline an investor experiences between a portfolio's peak (new high) and its subsequent low, also known as the valley (before it begins to recover). The table below highlights the five largest drawdowns encountered by the portfolio.
| Drawdown period | Recovery period | Total | |||||
|---|---|---|---|---|---|---|---|
| Max drawdown | Start | Valley | # Months | End | # Months | # Months | Chart |
| -19.02% | 1929-09-03 | 1932-05-31 | 33 | 1933-05-25 | 12 | 45 | |
| -18.37% | 2021-11-10 | 2022-10-20 | 11 | 2024-09-10 | 23 | 34 | |
| -16.68% | 2008-05-21 | 2008-10-10 | 5 | 2009-07-31 | 10 | 14 | |
| -11.69% | 2020-03-05 | 2020-03-18 | 0 | 2020-05-27 | 2 | 3 | |
| -9.44% | 1937-04-01 | 1938-03-31 | 12 | 1938-10-19 | 7 | 19 | |
| -7.52% | 1987-08-18 | 1987-10-21 | 2 | 1988-02-22 | 4 | 6 | |
| -6.69% | 1994-02-01 | 1994-05-09 | 3 | 1995-02-28 | 10 | 13 | |
| -5.23% | 1946-06-03 | 1947-05-30 | 12 | 1948-11-01 | 17 | 29 | |
| -4.94% | 1933-09-01 | 1933-10-31 | 2 | 1934-01-16 | 3 | 5 | |
| -4.93% | 1987-03-19 | 1987-05-20 | 2 | 1987-08-14 | 3 | 5 | |
20/80 US Stocks/Bonds took approximately 0 months on average to recover from major drawdowns of 20% or more. The largest drawdown reached -19.02% and the longest drawdown period lasted 45 months.