"The Callan Periodic Table of Investment Returns"

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Taylor Larimore
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"The Callan Periodic Table of Investment Returns"

Post by Taylor Larimore »

Bogleheads:

The Callan Periodic Table of Investment Returns is the most informative visual representation of U.S. stock category behavior that I know. It shows the danger and futility of trying to pick the "best" stock category.

The Callan Periodic Table of Investment Returns

Best wishes.
Taylor
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Re: "The Callan Periodic Table of Investment Returns"

Post by retiringwhen »

2017 and 2018 are almost perfectly flipped!
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Re: "The Callan Periodic Table of Investment Returns"

Post by CoastalWinds »

Has anyone studied/presented on it with respect to trends, especially contrarian indicators?
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Re: "The Callan Periodic Table of Investment Returns"

Post by james22 »

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GerryL
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Re: "The Callan Periodic Table of Investment Returns"

Post by GerryL »

The first time I saw this table was in a presentation by a consulting company my employer (Megacorp) brought in to meet with employees about 401ks. It was the most memorable part of the presentation. In fact, I don't remember anything else they showed or said.
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Re: "The Callan Periodic Table of Investment Returns"

Post by firebirdparts »

It is fascinating.
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Re: "The Callan Periodic Table of Investment Returns"

Post by Jazzysoon »

Taylor, Thanks for posting the updated table. The way the data is shown in this graphic is SO Impactful. Makes it is hard to argue against a 3 fund portfolio (for someone trying to sell you managed funds with AUM model, because they know have a 'secret sauce' worth the AUM fee).
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Re: "The Callan Periodic Table of Investment Returns"

Post by Forester »

The chart is missing precious metals.
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Re: "The Callan Periodic Table of Investment Returns"

Post by stan1 »

It does depict volatility but I've never really understood why some Bogleheads latch onto this graphic to justify a 3 fund portfolio.

What the chart says to me is "in a sea of chaos and complexity pay me a lot of money to churn your investments using my proprietary algorithm and unique market insights to pick the winners and avoid the losers".

So either Warren Buffett or Bernie Madoff could put it up at his annual meeting and say "see what I'm protecting you from".
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Re: "The Callan Periodic Table of Investment Returns"

Post by columbia »

It shows you that - in a world of uncertainty - owning one or two broad market funds + a bond fund is a logical choice, which can help to minimize regret.
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Re: "The Callan Periodic Table of Investment Returns"

Post by rascott »

Seems a good argument for a truly diversified portfolio that owns several different asset classes over one that is only in large cap (2 fund)
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Re: "The Callan Periodic Table of Investment Returns"

Post by typical.investor »

Non-U.S. Fixed Income (Bloomberg Barclays Global Aggregate ex US Bond Index) is an unmanaged index that is comprised of several other Bloomberg Barclays indices that measure the fixed income performance of regions around the world, excluding the U.S.
I assume that the foreign bonds are not hedged and thus not don't represent what Vanguard's international bonds returns (which are hedged) are like.
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Re: "The Callan Periodic Table of Investment Returns"

Post by Stinky »

I love this table. I was first exposed to it when Fidelity presented to my employer's Retirement Committee, and found it fascinating. I hadn't seen it for a while.

Over time, it guided me to understand that "past performance is no indication of future results". Therefore, a broadly diversified portfolio of index funds, with low fees, is what makes sense for me.
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Re: "The Callan Periodic Table of Investment Returns"

Post by Dottie57 »

I love this table too. In large measure this convinced me total market is the way to go.
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Re: "The Callan Periodic Table of Investment Returns"

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Re: "The Callan Periodic Table of Investment Returns"

Post by abuss368 »

Taylor Larimore wrote: Thu Sep 05, 2019 8:58 pm Bogleheads:

The Callan Periodic Table of Investment Returns is the most informative visual representation of U.S. stock category behavior that I know. It shows the danger and futility of trying to pick the "best" stock category.

The Callan Periodic Table of Investment Returns

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Don't Look For The Needle. Buy The Haystack."
Always enjoy this table. Really shows reversion to the mean.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: "The Callan Periodic Table of Investment Returns"

Post by abuss368 »

CoastalWinds wrote: Thu Sep 05, 2019 9:05 pm Has anyone studied/presented on it with respect to trends, especially contrarian indicators?
Remember there is an old investment saying and for good measure: past performance is no guarantee of future results.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: "The Callan Periodic Table of Investment Returns"

Post by rascott »

Dottie57 wrote: Fri Sep 06, 2019 11:06 am I love this table too. In large measure this convinced me total market is the way to go.

So you chose one box? TSMI will give you the returns of the large cap equity box, nothing more or less....

26 years of data.... you own large cap equity. Regardless what name is put on it.


https://www.portfoliovisualizer.com/bac ... 0&total3=0




Not that there is anything wrong with that.... it's been a pretty good place to be. :sharebeer
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Re: "The Callan Periodic Table of Investment Returns"

Post by Jack FFR1846 »

I love this thing. I have it printed out and hanging in my office.
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Re: "The Callan Periodic Table of Investment Returns"

Post by Elric »

rascott wrote: Fri Sep 06, 2019 1:18 pm So you chose one box? TSMI will give you the returns of the large cap equity box, nothing more or less....

26 years of data.... you own large cap equity. Regardless what name is put on it.


https://www.portfoliovisualizer.com/bac ... 0&total3=0
Not that there is anything wrong with that.... it's been a pretty good place to be. :sharebeer
:thumbsup And the rest of the market has, over that time period, done better: https://www.portfoliovisualizer.com/bac ... 0&total3=0
Usual disclaimer: past performance may not be indicative of future results. :wink:
Last edited by Elric on Fri Sep 06, 2019 2:29 pm, edited 1 time in total.
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Re: "The Callan Periodic Table of Investment Returns"

Post by Moland »

First saw this about 1999. This led me to asset allocation with periodic rebalancing.
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Re: "The Callan Periodic Table of Investment Returns"

Post by LadyGeek »

The wiki has some background info: Callan periodic table of investment returns

I'll update the chart for 2018 when I can.
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Re: "The Callan Periodic Table of Investment Returns"

Post by heyyou »

Now survey the responses above to see how broad the spectrum of personal interpretations is. There's the problem-- we each see the chart as enforcing our own current biases, from total market through slice and dice. It is a Rorschach inkblot for our perceptions about stock market allocations. Thank goodness all of the stock allocations work well enough, since none are truly wrong. Some of the above choices, just don't suit other investors.
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Re: "The Callan Periodic Table of Investment Returns"

Post by FIREchief »

I like that chart. When I look at it (today), it reinforces my decision to go 100% US TMI for equities. They are rarely the top or bottom, but typically middle of the road. That suits my needs just fine for the long term.

When I first looked at it, it was presented as a case to own everything, because that way a person is assured of having some of their assets in the "winner" each year. It didn't take me long to realize that this also assured a person of having some of their assets in the "loser" each year. To each their own... :sharebeer
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Re: "The Callan Periodic Table of Investment Returns"

Post by Jags4186 »

What I don’t like about the chart is it doesn’t give you an idea of magnitude. Take a look at 2015, the difference between the best performance asset class and the worst performing was about 16%. Compare it to 2009 where the difference between best and worst is nearly 80%.

What would be really interesting is to see the chart reorganized so that there is a center line where everything above is positive return, everything below is negative return, and the size of each box is proportional to the % change.
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Re: "The Callan Periodic Table of Investment Returns"

Post by Dottie57 »

rascott wrote: Fri Sep 06, 2019 1:18 pm
Dottie57 wrote: Fri Sep 06, 2019 11:06 am I love this table too. In large measure this convinced me total market is the way to go.

So you chose one box? TSMI will give you the returns of the large cap equity box, nothing more or less....

26 years of data.... you own large cap equity. Regardless what name is put on it.


https://www.portfoliovisualizer.com/bac ... 0&total3=0




Not that there is anything wrong with that.... it's been a pretty good place to be. :sharebeer
I do have a small tilt to extended market in 401k as TSM is not available. But I have been happy with selections for most part.
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Re: "The Callan Periodic Table of Investment Returns"

Post by willthrill81 »

Elric wrote: Fri Sep 06, 2019 1:42 pm
rascott wrote: Fri Sep 06, 2019 1:18 pm So you chose one box? TSMI will give you the returns of the large cap equity box, nothing more or less....

26 years of data.... you own large cap equity. Regardless what name is put on it.


https://www.portfoliovisualizer.com/bac ... 0&total3=0
Not that there is anything wrong with that.... it's been a pretty good place to be. :sharebeer
:thumbsup And the rest of the market has, over that time period, done better: https://www.portfoliovisualizer.com/bac ... 0&total3=0
Usual disclaimer: past performance may not be indicative of future results. :wink:
But Bogle only liked TSM, so that makes it the de facto best choice, right? :wink:
Jags4186 wrote: Fri Sep 06, 2019 2:31 pm What I don’t like about the chart is it doesn’t give you an idea of magnitude. Take a look at 2015, the difference between the best performance asset class and the worst performing was about 16%. Compare it to 2009 where the difference between best and worst is nearly 80%.

What would be really interesting is to see the chart reorganized so that there is a center line where everything above is positive return, everything below is negative return, and the size of each box is proportional to the % change.
I entirely agree.

Truth be told, the graph doesn't contain much useful information. Ordinal data like that don't convey nearly as much as ratio data.
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Re: "The Callan Periodic Table of Investment Returns"

Post by JAZZISCOOL »

Taylor Larimore wrote: Thu Sep 05, 2019 8:58 pm Bogleheads:

The Callan Periodic Table of Investment Returns is the most informative visual representation of U.S. stock category behavior that I know. It shows the danger and futility of trying to pick the "best" stock category.

The Callan Periodic Table of Investment Returns

Best wishes.
Taylor
Jack Bogle's Words of Wisdom: "Don't Look For The Needle. Buy The Haystack."
For those who would like to "geek out" with Russell's value/growth/size indices, you can look at this website (select US Equity Performance Quilts > Russell US Indexes Growth and Value). All flavors of FTSE Russell indices on their website for your viewing pleasure, e.g. smart beta and factor indices.

https://www.ftserussell.com/ftse-russel ... nce-quilts

I know there are some who may have a small cap value tilt in your portfolio. This chart allows you to see the calendar year performance of the Russell 2000 Value Index vs. all the others (value/growth/size). 2016 was the only calendar year where the Russell 2000 Value Index beat all of the others (in the last decade or so.) "Past performance is not indicative of future results" as we all know.
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Re: "The Callan Periodic Table of Investment Returns"

Post by heyyou »

A previous discussion had a link to the Callan info sorted above and below zero return, but I couldn't find the link that I thought I had saved.
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Re: "The Callan Periodic Table of Investment Returns"

Post by montanagirl »

What I get out of this is, if bonds or cash is on top it's not that it's doing so well but that everything else is doing so bad. :|
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Re: "The Callan Periodic Table of Investment Returns"

Post by fortyofforty »

montanagirl wrote: Sat Sep 07, 2019 12:16 pm What I get out of this is, if bonds or cash is on top it's not that it's doing so well but that everything else is doing so bad. :|
Very true. Hence the benefit of diversification.
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Re: "The Callan Periodic Table of Investment Returns"

Post by DaleMaley »

Back maybe 10 years ago, I showed a printed copy of the Callan table to a bunch of people...........every single one immediately tried to identify a trend..........when there is not really any trend.

I read somewhere it is human nature to look for visual trends, because of generations of being on the look-out for the lion by the watering hole :)
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Re: "The Callan Periodic Table of Investment Returns"

Post by james22 »

:oops:

If the purpose is to confuse customers, i.e. to claim that fund class does not matter, then this chart succeeds. However, on closer look, one might observe that three of the 12 classes showed up disproportionately at the top rank so the chart is somewhat misleading. Directional evidence is buried in the palette of colors; but how to separate the noise from the signal?

The "best" graphic is one where form matches function. If my goal is to help customers understand their expected return and risk for different fund classes over the last 15 years, then the side-by-side boxplot works wonders.


https://junkcharts.typepad.com/junk_cha ... o_the.html

The referenced posts:

The idea, I guess, is to be able to see which asset classes have done relatively well or poorly over time: within each year, the best-performing asset class is at the top and the worst is at the bottom. If you pick out a single color, it’s barely possible to follow how it has performed (relatively) by seeing where it sits in each year…sort of mentally connecting the boxes into a line graph. ...

This is a very bad graphic. Although the actual performance for each class in each year is given numerically, the graph itself gives no information about this, which is after all the most important characteristic of an investment.


https://statmodeling.stat.columbia.edu/ ... st_8/#more

https://statmodeling.stat.columbia.edu/ ... ying_fina/
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Re: "The Callan Periodic Table of Investment Returns"

Post by jello_nailer »

montanagirl wrote: Sat Sep 07, 2019 12:16 pm What I get out of this is, if bonds or cash is on top it's not that it's doing so well but that everything else is doing so bad. :|
Yep, and what I get out of it is that Emerging Markets either suck or kill it. Never seem to be in the middle.

I love this chart. Have shared it with many.
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