We’re talking about a simple portfolio that absolutely anyone could follow in their own 401(k) or IRA or retirement account. Low cost, no muss, no fuss. And it’s managed to do two powerful things simultaneously.
We’re talking about a simple portfolio that absolutely anyone could follow in their own 401 or IRA or retirement account. Low cost, no muss, no fuss. And it’s managed to do two powerful things simultaneously.
AANA is amazingly simple, surprisingly complex, and has been astonishingly durable. It consists simply of splitting your investment portfolio into 7 equal amounts, and investing one apiece in U.S. large-company stocks , U.S. small-company stocks , developed international stocks , gold GC00, +1.62%, commodities, U.S. real-estate investment trusts or REITS, and 10 year Treasury bonds TMUBMUSD10Y, 3.562%.
AANA did way better than the more usual Wall Street investments during 2022’s veil of tears. While it ended the year down 9.6%, that was far better than the S&P 500 , or a balanced portfolio of 60% U.S. stocks and 40% U.S. bonds, which fell 17%.Last year’s success of AANA is due to two things, and them alone: Its exposure to commodities, which were up by about a fifth, and gold, which was level in dollars .
Since the start of 1973, according to data from New York University’s Stern business school, that 60/40 portfolio has earned an average compound return of 9.1% a year. That’s less than AANA. Oh, and this supposedly “balanced” portfolio fared very badly in the 1970s, and badly again last year. There are many worse investment portfolios out there, and it’s a question how many are better. AANA will underperform regular stocks and bonds in a booming bull market, but do better in a lost decade.
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