The asset allocation quilt

The table ranks 10 asset classes in order of their return performance—from the highest to lowest—for each calendar year in the 10-year period from 2012 to 2021. For example, mid-caps delivered 38.52% in 2012 and small-caps gave a return of 36.45% in the same year. The absence of any pattern in the returns of asset classes from one year to the next reinforces the importance of asset allocation to build a portfolio against trying to consistently predict the next winning asset class. A diversified portfolio of stocks, bonds, and physical assets is key to steering through every market condition. Such a portfolio may not deliver the highest return in any given year but will perform competitively across market cycles.