The concept of diversification is ingrained in the world of investing, often accompanied by the age-old adage of not placing all one’s assets in a single basket. The Investment Returns Quilt consistently emerges to underscore this fundamental principle. These visual aids paint a clear picture of why diversification remains a pillar in investing.

Crafted by Callan Associates, an investment consulting firm, the Callan Charts emerged as a tool to help investors comprehend the long-term performance trends across various asset classes. These charts facilitate easy comparisons and analyses of returns spanning an array of investments, including stocks, bonds, real estate, and commodities.

(Source: Callan Institute)

The significance of the Callan Charts becomes evident when reviewing major investing asset classes and their annual performances from 2017 to 2022, complemented by the monthly performance data for 2023 until June. Despite its simplicity, the chart details out the complex truth that is often difficult for investors to fully embrace. The desire to chase after the latest market trends can obscure the fundamental wisdom of diversification.  Simple message, but easier said than done for most.

While each investor’s asset allocation should be tailored to their personal financial plan, it remains imperative to emphasize how things change, and change quickly over time.

Presented by the Financial Planning Committee of Lake Street, an SEC Registered Investment Adviser

The information contained herein constitutes general information and is not directed to, designed for, or individually tailored to, any particular investor or potential investor. This report is not intended to be a client-specific suitability analysis or recommendation, an offer to participate in any investment, or a recommendation to buy, hold or sell securities. Do not use this report as the sole basis for investment decisions. Do not select an asset class or investment product based on performance alone. Consider all relevant information, including your existing portfolio, investment objectives, risk tolerance, liquidity needs and investment time horizon. Diversification does not ensure a profit or guarantee against a loss. There is no assurance that any investment strategy will be successful. Investing involves risk and you may incur a profit or a loss.