Average returns for funds with an equal mix of stock and bond allocations have historically been "statistically equivalent" during recessions and expansions, according to Vanguard. Vanguard studied balanced funds' historical performance from 1926 through June 2009.
The reason for this, according to Vanguard's research, is that during a recession, bonds typically outperform stocks as investors search for safety. Furthermore, stock prices tend to fall in the period before a recession is declared and rise again as the economy begins to recover.
Consequently, the average returns for balanced funds between 1926 and 2009 have been "similar regardless of whether the U.S. economy was in or out of recession."
Complete your profile to continue reading and get FREE access to BenefitsPRO, part of your ALM digital membership.
Your access to unlimited BenefitsPRO content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking benefits news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical converage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
