Reviewing My Favorite Performance Chart for 2025

I have been updating my apportionment quilt for over ten years now.

Here is the latest iteration until 2025:

Some thoughts:

Foreign stocks are rising. Developed and emerging market stocks have had a rough ride this cycle (relative to the S&P 500).

2025 was the first year since 2017 that both asset classes outperformed the S&P 500. 10-year returns lagged significantly for US stocks but 2025 was a great year for international stocks. And the long-term benefits are appreciated as well.

Goods are doing better. Goods¹ had negative returns for 10 years until the end of 2017, 2018, 2019, 2020, 2021, 2022 and 2023. So the fact that the asset has now delivered a respectable annual return of around 6% over the past 10 years is a big change from the previous cycle.

The stock is having a good 2020s, up 65% over the decade.

High quality bonds have been the worst performing asset class over the past 10 years. If you kept your money in T-bills for the past 10 years you would have outperformed the Aggregate Bond Index.²

And that’s despite the fact that cash has been generating unlike the meager amounts of the past decade. It was a hard stretch of bonds.

Fortunately, yields are high now so returns should be much better from here.

Refunds have been good for a few years. T-bills were up 4-5% in 2023, 2024 and 2025. That’s a good run considering that earnings were stagnant for much of the 2010s and early 2020s.

Will it continue?

The Fed is already cutting rates so I would say don’t get used to it. Enjoy it while it’s still there.

Small caps and mid caps have done well. Most investors have been nervous about small and mid-cap stocks because they have not performed well in recent years.

But look at the 10-year returns – roughly 10% per year for both.³

Yes, large cap stocks have outperformed on average but on an absolute basis small and mid cap stocks have been doing well. Everything cannot work well at the same time.

Markets don’t work like that.

High rates hurt REITs. My 11-year-old daughter would look at REIT returns and tell me they were average.³

Slower activity in the real estate market is certainly contributing but higher interest rates have clearly led to lower yields for this rate-sensitive asset class.

Large cap stocks have become more common. The S&P 500 is up about 15% annually over the 10 years ending in 2025. How does that stack up historically?

I looked at a 10-year return going back to 1928:

We’re not quite at the peak of the late 1940s or late 1980s but it’s pretty close.

There is a very clear pattern of above average performance followed by below average performance.

Logic would suggest that this pattern should continue but who knows what the range of above and below average performance should look like going forward.

And time is always the tricky part of the equation.

Further reading:
Reviewing My Favorite Performance Chart for 2024

¹I use DJP as a proxy for a different basket of goods.

²The return to two decimal places was 2.04% compared to 1.95%.

³I know I shouldn’t make fun of the way kids talk these days because we’ve said some weird things in my day but I can’t help it.