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Happy new year! 🎉🥳It’s time to look back and see how the year fared for him across the broad range of asset classes I track. According to Morningstar, after the market closes on December 29, 2023, the annual total returns (including price appreciation and dividends/interest) for some asset classes benchmarked by popular ETFs are:
The “set it and forget it” Vanguard Targeted Retirement 2055 Fund (VFFVX), currently comprised of approximately 90% diversified stocks and 10% bonds, is up 20.2% in 2023, nearly eliminating the decline in 2022. I couldn’t get over it, but I couldn’t get over it completely.
Explanation. Historically, the S&P 500’s annual returns are negative approximately once every four years. In 2020 and he was almost all up in 2021, but in 2022 he was almost all down.
Even in late October, it wasn’t clear whether 2023 would end with positive returns.
For most of us, the best thing we can do is “stay the course” and enjoy the up years, knowing that there will always be down years sprinkled in there. I try not to listen to predictions, and I try not to listen to the daily market closing announcements. As you stand by the roulette table and stare at the red and black numbers that come up, your mind will start to find patterns where they don’t exist.
Instead, I prefer to dig into these “long-term view” numbers. For example, if you have been investing steadily in the popular Vanguard Targeted Retirement 2055 fund for the past several years, your cumulative returns have been solid despite the world’s many problems.
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