Free Wealth Management Guide Building An Effectively Diversified Investment Por | Page 5

ernment Credit bond index. A 60/40 split between equities and fixed income is the most popular allocation used
by individual and institutional investors to balance risk
and return and these are two of the most popular indexes
representing the U.S. stock and bond market.
To see how this 60/40 benchmark portfolio has performed, we will examine the results of a comprehensive
investment study. The chart below reflects research done
on the performance of 192 corporate pension plans from
1988 to 2005. The plans were ranked from highest to
lowest performer, based on average annual return for the
18-year period. Every tenth plan’s performance is graphed.
The graph also features the historical