1. Rebalance to control risk.
2. For simplicity: (a) Only Domestic Stocks/Bonds, (b) 15-year period starting 1/1/97, (c) $1 million, split 50/50 annual rebalance.
Code: Select all
$1 Million 50/50 $1 Million 50/50 Rebalanced
Year VTSMX VBMFX VTSMX VBMFX TOTAL VTSMX VBMFX TOTAL
2012 16.25% 4.05% 1,336,819 1,264,265 2,601,084 1,493,264 1,336,552 2,829,816 <- +8.8% risk-adjusted return
2011 0.96% 7.56% 1,149,952 1,215,056 2,365,007 1,243,871 1,325,186 2,569,057
2010 17.09% 6.42% 1,139,017 1,129,654 2,268,671 1,290,859 1,173,228 2,464,087
2009 28.70% 5.93% 972,771 1,061,505 2,034,276 1,209,439 995,461 2,204,901
2008 -37.04% 5.05% 755,843 1,002,082 1,757,925 704,312 1,175,158 1,879,470
2007 5.49% 6.92% 1,200,514 953,909 2,154,423 1,111,135 1,126,197 2,237,331
2006 15.51% 4.27% 1,138,036 892,171 2,030,207 1,107,176 999,440 2,106,616
2005 5.98% 2.40% 985,227 855,635 1,840,862 974,979 942,044 1,917,022
2004 12.52% 4.24% 929,635 835,581 1,765,216 955,106 884,823 1,839,929
2003 31.35% 3.97% 826,195 801,594 1,627,789 947,596 750,069 1,697,665
2002 -20.96% 8.26% 629,003 770,986 1,399,989 608,881 833,976 1,442,857
2001 -10.97% 8.43% 795,803 712,161 1,507,964 694,661 846,030 1,540,690
2000 -10.57% 11.39% 893,860 656,794 1,550,653 694,932 865,577 1,560,509
1999 23.81% -0.76% 999,507 589,634 1,589,142 862,666 691,471 1,554,137
1998 23.26% 8.58% 807,291 594,150 1,401,441 740,885 652,647 1,393,532
1997 30.99% 9.44% 654,950 547,200 1,202,150 654,950 547,200 1,202,150