I get it. Historical Returns by Asset Class (1985 - Oct 2020) - Visual Capitalist I manage portfolios for institutions and individuals at Ritholtz Wealth Management LLC. The Bond Index until 1972 was calculated using Edward McQuarrie's data (pages 38-40).Until 1826 the index consists of federal bonds, until 1850 it's mostly municipal bonds, and until 1897 it's an aggregate of federal . If mean reversion holds true then the average stock market return going forward will be significantly below 9.71%. Interpretation. Short term high quality worked fine. 10 Year Treasury Rate - 54 Year Historical Chart | MacroTrends Vanguard Total Bond Market Index Fund (BND) - Yahoo! In 1985, Broccoli would return the favour by fulfilling Spielberg's request to use the James Bond theme music for a scene in his film, The Goonies (1985 . But, the educated investor whos aware of the average bond returns and the average stock returns has a leg up on the less-informed investor. Long-term government bond yields declined from a high of 15% in 1981 to 6% by the end of the century, leading to higher bond prices. What's Changing: Real, Inflation-adjusted Returns Will Be Lower The experience of the 1970s taught us that higher inflation makes life difficult for everyone. The average standard deviation over this period was 14.55 for the Robbins portfolio. The bond market has, thus far, delivered its worst year on record, while the benchmark S&P 500 produced its worst first-half return since 1970. The 20th century had more than one episode of hyperinflation, but the one that Germany experienced in the early 1920s was particularly severe. by Christine_NM Thu Apr 09, 2009 11:51 am, Post Long-term. Charted VWESX which looks like the NAV lost about 30% from 1974 to 1980. Long-Term Corporate Bond Index, 25% U.S. ", Reuters. Investing in the 1970s Teach savvy professionals how to invest to build wealth. If we assume that going forward the S&P 500 will return 6% on average and that the 1-year Treasury Bond will return 4.0% then we can expect the future annual return on a 60% stock and 40% fixed investment portfolio to yield approximately 5.2% annually. All of the countries listed in the table below showed positive real returns on their equity markets during this period. Way more fun than now. I remember those times. Many retail investors shun the bond market because it does not offer the same level of potential upside as the stock market. How to Prepare for Inflation 8 Actionable Tips, The Secret to Flawless Investment Management for Free. Your risk tolerance, or comfort with the ups and downs of your investment portfolio will drive your investment mix. Understanding what that means and which assets do well in stagflation are the keys to outlasting this rough market. You can learn more about the standards we follow in producing accurate, unbiased content in our. A debt fund is an investment pool, such as a mutual fund or exchange-traded fund, in which core holdings are fixed income investments. What Is the Difference Between a Gilt-Edged Bond and a Regular Bond? I would expect TIPS to do the opposite. Not surprisingly, when you start from a very low interest rate the bonds tend to generate a low nominal return. What worked (and didn't work) during 1970s stagflation - Sovereign Man by haberd Thu Apr 09, 2009 2:20 pm, Post We also reference original research from other reputable publishers where appropriate. What Is the Average Net Worth of the Top 1%? All reviews and articles are based on objective analysis and no compensation will sway our opinion. Since Im a control freak, and the future is unknowable, knowing historical stock and bond returns gives me an illusion of control over my investments. It wasn't until these restrictions were lifted that the bond market began to reflect the new inflationary environment. Ultimately, you want to create a diversified investment portfolio, so even if one asset class tanks, youll be saved from disaster with other better performing ones. For example, from a low of 1.9% in 1951, long-term U.S. bond yields then climbed to a high of 15% by 1981. Yet, thats not always the case. The junk bond market grew exponentially during the 1980s from a mere $10 billion in 1979 to a whopping $189 billion by 1989, an increase of more than 34% each year. Remember- the Dow Jones Industrial Average opened in 1970 at 809 points. For example, BlackRock's iShares website contains daily data on its bond ETFs. Instead of a search for. This chart gives a different view of the data from the chart above, comparing the percentage change between S&P 500 and the Total Return Bond Index over time. This Best Asset Allocation Based on Age and Risk Tolerance will give you a rubrick for choosing your investment mix. That's more than 40% more than bonds' average annual returns, and over 10% higher than a balanced portfolio of both stocks and bonds. Is a 10% Return Good or Bad? Younger and more aggressive investors will own greater percentages of stock investments. Everythingworked and gloriously so. Films made in the 1970s featuring the character of James Bond included Diamonds Are Forever, Live and Let Die, The Man with the Golden Gun, The Spy Who Loved Me, and . In some years stocks and bond returns show an inverse relationship, when stocks go up, bonds go down. In the 1970s, the globalization of world markets began again in earnest. How the Great Inflation of the 1970s Happened - Investopedia If youre wondering why you should care about the average bond return or the stock and bond market performance, read on. Bond Benchmarks - WSJ Featured image credit: Photo byDrew BeameronUnsplash. But it can give you a better sense of the risk involved in these asset classes since risk is much easier to predict than returns. Shadow of 1970s inflation starting to worry bondholders A 40/15 bond portfolio of long and intermediate durations generated a 2.5% return over this period. Cash is the most boring of asset classes but there are some interesting results in the long-term numbers. Its important to remember a bad day in the stock market is basically a bad year in the bond market: Shockingly, 10 year treasuries have had just one double-digit loss in a calendar year going all the way back to 1928. Its a double-whammy. Understanding the correlation of equity and bond returns Bonds are used as a portfolio stabilizer for a reason. I'm not sure of the exact year, but I think it's from 1972.It was still being shown in the 80's on late night TV. Throughout this decade, junk . During the worst of the two periods, 1922-23, inflation reached an unfathomable 209,000,000,000%. Increased prices and decreased wages equate to razor-thin . Mean reversion is a theory used in finance that suggests thatassetprices and historical returns eventually will revert to the long-run mean or average level of the entire dataset., ~Investopedia. Notice that stock returns are usually higher than bond returns, although not always. Why markets need to heed the lessons from the 1970s Two of the worst 10 days in stock market history occurred in the 2020 Corona crash (-12.0% and -9.5%). Triumph of the Optimists: 101 Years Of Global Investment Returns, a 2002 book written by Elroy Dimson, Paul Marsh, and Mike Staunton, can help us review bonds in the 20th century. Its just not a good example. For example, 1950 represents the 10-year annualized return from 1940 to 1950. According to Dimson, Marsh, and Staunton, the U.S. government kept bond yields artificially low through the inflationary period of World War II and up to 1951. Im a bit obsessed with historical stock and bond returns. Each year he updates the annual returns for stocks (S&P 500), bonds (10 year treasuries) and cash (3-month t-bills). Was the 1966-1982 Stock Market Really That Bad? However, bonds continued to produce substantial returns. "Germany Government Bond 10Y. For example, during the first decade of the century with deplorable stock market returns, emerging market stocks averaged over 9% per year. Thats why its called a risk premium, not a return premium. They calculated that roughly half of this difference was related to the default premium. Writer, U.S. News & World Report. Inflation-Indexed Bonds | NBER Information provided on Barbara Friedberg Personal Finance is for informational/entertainment purposes only. Re: How did Bond funds do during the 1970's. Yet, the problem with this calculus is that as interest rates rise, bond values fall. Hines Global Income Trust Closes on Historic WGN-TV Studios in Chicago. This is a great point that too many investors forget. js = d.createElement(s); js.id = id; Adding $100 to These 5 Stocks Would Be a Genius Move Right Now However, equity markets staged a strong comeback to end 2020 with higher nominal returns than bonds. If this occurs, it will have important implications for asset allocation decisions. So a single day in the U.S. stock market last year experienced a larger loss than U.S. government bonds have experienced over an entire year. Now, some economists believe it has already returned. So, future bond performance appears to be more of a mystery. This occurred because compounding gave people who put their money in bonds a head start that later investors were not able to match in most cases. What Assets Do Well During Stagflation? - Financhill Because yields move in the opposite direction of price, the average yield on these bonds has climbed to a very high 60.4%. These returns should be put into context, though. Outside of the United States, negative bond yields have already become normal in Germany and Japan. Using the above data, had you invested in the 60/40 portfolio, your average annual returns would have been as follows: Now comes the tricky part, using the reversion to the mean theory to approximate future returns. Innovation in the bond market also increased during the last three decades of the 20th century, and this will likely continue. It is comparable in size to the stock market and has enormous depth. The average 0.51% return is well below 4.58% average return of the prior 50 years. Next, well explore the average annual returns for bonds, stocks, and cash during various periods. S&P U.S. Aggregate Bond Index | S&P Dow Jones Indices Many portfolio managers, financial planners and investors adhere to a 60/40 investment portfolio. Investing Explained: Types of Investments and How To Get Started, The Bond Market (aka Debt Market): Everything You Need to Know, Industrialization: What It Is, Examples, and Impacts on Society, Long-Term Government Bond Yields: 10-Year: Main (Including Benchmark) for the United States, U.S. Treasury Yields Tumble to Record Lows on Virus, Oil Fears. Surprisingly, cash returns this low have happened before. Read: Would you Invest in a 100% Muni Bond Portfolio? Early investors in these new securities were compensated for taking on the challenge of understanding and pricing them. Take a look at the S&P 500 average stock market returns during the first decade of the 20th century, after the dot com tech bubble burst: Data source; http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html. From 1970 through 2019, the stock market returned roughly 10.50% while cash, 10-year Treasury Bonds, and Baa corporate bonds averaged 4.58%, 6.99% and 9.18%. I also like Rick Ferris Core 4, for easy to craft investment portfolios. by johnjtaylorus Sun Oct 18, 2009 5:51 pm, Return to Investing - Theory, News & General, Powered by phpBB Forum Software phpBB Limited, Time: 0.278s | Peak Memory Usage: 9.77 MiB | GZIP: Off. Erik Conley at ZenInvestor predicts that the stock market will average in the low single digits over the next ten years, or possibly in negative territory. EquityMultiple Real Estate Review Is This Investment for You? One of my favorite free sources of historical returns comes from NYUs Aswath Damodaran. Robbins focuses onasymmetric returns in the book, but failed to put together a realistic analysis of the types of risk adjusted returns this portfolio might generate in a LOW AND RISING interest rate environment. In turn, interest rates rose to nearly 20%. Annual Returns on Investments in : Value of $100 invested at start of 1928 in : Annual Risk Premium: Annual Real Returns on: Year: S&P 500 (includes dividends) 3-month T.Bill: US T. Bond Baa Corporate Bond: Real Estate: S&P 500 (includes dividends)3: 3-month T.Bill4: US T. Bond5 Baa Corporate Bond6: Real Estate2: Stocks - Bills For example, Germany saw two periods in which fixed income was all but wiped out. Long-Term Government . When you take the deflation into account, real returns from 1928-1941 were actually higher while the 1969-1977 returns were negative for stocks, bonds and cash after inflation. In countering this claim, Robbins cites the 70s as proof that the All Weather portfolio can perform well in a rising interest rate environment. The Bogleheads Wiki: a collaborative work of the Bogleheads community, Local Chapters and Bogleheads Community. , myself included, have criticized the recommendation of this portfolio, Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and. From there NAVs went down as inflation increased for a couple of years, so there was a paper loss while I was holding them. "Effective Federal Funds Rate(FEDFUNDS). The bond market is the collective name given to all trades and issues of debt securities. Be cautious of websites that suggest future stock market returns will be greater than 9 or 10%. What is a Good Investment Return? So there's your bond return in the period where interest rates were LOW AND RISING - a. The 10 year treasury is the benchmark used to decide mortgage rates across the U.S. and is the most liquid and widely traded bond in the world. Several people, myself included, have criticized the recommendation of this portfolio given that the portfolio, which is bond heavy, is unlikely to perform well in a low and rising interest rate environment. A Look At Bond Yields 1934 To 2015 | Gold Eagle Sharply rising bond yields can rain pain upon us for years. The COVID-19 pandemic dramatically impacted humanity and roiled global capital markets. The offers that appear in this table are from partnerships from which Investopedia receives compensation. Show Recessions Download Historical Data Export Image Of course. But a rising rate environment is no picnic if you're short on time. During the first three years of the decade, the stock market lost 9.03%, 11.85%, and 21.97%. That involves keeping track of operational and overhead costs, along with tracking revenue versus spending. Does the Stock Market Care Who the President Is. Why the Bond Market Could Repeat History - Daily Reckoning Stocks have averaged about a 11.75% annual nominal return, gold has generated a 11% return since 1971 (when it was unpegged) and commodities have generated returns in-line with the rate of inflation (roughly 3.5%). The following chart shows rolling 10-year returns from 1938 through 2019 for the performance of stocks compared to bonds. Notice the 3-month treasury bill returns, the cash proxy, during the previous ten years. Taxes on nominal bond interest payments simply kill you in times of high inflation. The 1970s were actually worse than the 1930s when it comes to real returns. Interactive chart showing the daily 30 year treasury yield back to 1977. When we take out gold and commodities returns from the 1970s, the best performing asset class was, surprisingly, bonds. if (d.getElementById(id)) return; The bond market entered the 21st century coming off its greatest bull market. }(document, "script", "aweber-wjs-xs79idvq2")); If the reversion to the mean theory holds true, then over the next decade or so, we may see higher interest rates and higher bond yields. For example, new asset classes such as inflation-protected securities, asset-backed securities (ABS), mortgage-backed securities, high-yield securities, and catastrophe bonds were created. The use of instruments such as interest-rate futures, interest-rate swaps, and credit default swaps (CDS) will probably continue to grow. Bell bottoms, long hair, aviator glasses, and disco music were popular. Youll also find risk tolerance and asset allocation templates. So, in a LOW AND RISING interest rate environment the Robbins All Weather portfolio takes 72% of the risk of the S&P 500 and generates about half of the return. Stocks vs. Bonds - 151 Year Chart | Longtermtrends So real estate did great in the 1970s. Publisher, Barbara Friedberg Personal Finance.com. With no changes to that percentage over time that means the amount saved would have compounded by 8.8% per year based on wage growth. The high inflation of the 1970s was essentially the result of the monetary dislocation that followed the breakdown of the Bretton Woods semi-fixed exchange rate system. Yet, as demonstrated by the graph at the beginning of the article shows corporate bond yields have trended downward since 1986, with a few periodic reversals. Clearly, investing in stocks is the riskiest asset class with the most volatile returns. Historically, the S&P 500 generates an annual standard deviation of about 20. 1970s Inflation Redux? - Single Point Partners Finally, continued strong demand for fixed income from the likes of pension funds will only help accelerate these trends over the next few decades. Further Reading: Investopedia does not include all offers available in the marketplace. December 2, 2021. Imperfect as they are, equities are more robust in this kind of environment as are TIPS. What is more, the stock market showed extreme volatility during that decade. Prices rising on rent, food, and gas eat up a greater proportion of their budget. Do you possess such data and on what terms would you be willing to share it? The risk premium built into bonds during the 1900s was much too low to compensate investors for the forthcoming turmoil. Over this same period, LT bonds underperformed inflation by over 4.5% per year, and the S&P 500 had 0 real return, while Large Value stocks outpaced CPI by almost 4.5% per year, and Small Value stocks exceeded CPI by over 9% per year. If mean reversion holds true then you would expect financial asset returns to behave in a way that their average going forward would lean towards lower returns. The S&P U.S. Can we expect future bond yields to rise? This period saw two secular bear and bull markets in U.S. fixed income. The History of High-Yield Bond Meltdowns - Investopedia This equates to 60% invested in stocks and 40% invested in bonds. The bull market in bonds showed continued strength in the early 21st century, but that strength brings the future into question. And most traditional financial investments suffered too. Rolling 10-year returns for each year represent the annualized return for the previous 10 years. Historical market data cant help you predict the future but I still find it useful as a way to understand the potential risks and rewards you can see as an investor. This chart compares the annual returns of: Data source: http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/histretSP.html. Here are the performance numbers for 2020: And the annual returns from 1928 to 2020: Damodaran also includes the inflation rate in his data which allows you to view real returns. Would you Invest in a 100% Muni Bond Portfolio? Historical Stock and Bond Returns - Predict Future Investment Performance Interested in knowing the long term performance of bond funds especially through the 1974 -75 inflation era. The Great Depression was a devastating and prolonged economic recession that followed the crash of the U.S. stock market in 1929. Inflation peaked at the end of the First and Second World Wars as a result of increased government spending during those periods. by Ricola Thu Apr 09, 2009 2:06 pm, Post Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. So there's your bond return in the period where interest rates were LOW AND RISING - a whopping 2.5%. This means that a bond with face value of $100 could be purchased for $30. This is less than half of the average return of T-Bonds in the 1970s (5.58%). Looking through 93 years of returns for stocks, bonds and cash wont help you predict future returns for these asset classes. The 1970s saw some of the highest rates of inflation in the United States in recent history. Maybe this will hold for a year or two, but the chances are slim that the stock and bond market returns will match those of the previous decade. by Sidney Thu Apr 09, 2009 4:35 pm, Post Cash is trash as a long-term investment because it will lose money to inflation so the fact that its actually beat the stock market over cycles of 14, 9 and 9 years says more about the risk involved in the stock market than anything. More conservative investors and those that are approaching retirement will lean towards an investment portfolio with a greater percent of bond type investments. The Historical Performance Of Stocks And Bonds - Forbes Advisor What is a CDS Spread? The S&P Goldman Sachs Commodity Index (GSCI) does actually go back to 1970. This was the turning point for the century's second bull market. Not since the Gilded Age had the world seen such globalization, and this would really start to have an impact on bond markets in the 1980s. Equity investors triumphed over bond investors during the 20th century. The price of oil was up 870% from the OPEC oil embargo. On January 31, 1986, the Baa corporate bond yield was 11.36%. For the most part, investing in fixed income during the past century was not an overly lucrative proposition. When you visit the site, Dotdash Meredith and its partners may store or retrieve information on your browser, mostly in the form of cookies. And the stock market produced dismal returns. Trust me. No one can predict future investment returns. We could be heading for a golden age - or a return to the 1970s But unless you got the timing exactly right, most of this advice would have turned out disastrous. I bought some condos in a ski area in 1975 after the bust for $25K each with some partners. Cash returns have been below 2% in every calendar year since 2008, with an average annual return of just 0.6% from 2008-2020. The bond market, on the other hand, remained relatively stable, as shown in the table below. Link to calculator for 1950-1959. Rising bond yields: what happens to bonds when interest rates rise Now lets apply the other components. Long-term bond yields declined from a high of 15% in 1981 to 6% by the end of the century, leading to higher bond prices. The second time came about as Paul Volker jacked short term interest rates up to double digits in the late 1970s and early 1980s, but both these episodes of inverted muni-bond yields were short in duration. I dont know but Im leaning towards the former rather than the latter. 1960 - 1970 The 1960's experienced fairly routine returns combined with moderate inflation. There was an astonishing amount of sex," said Ferguson. You can find out more about our use, change your default settings, and withdraw your consent at any time with effect for the future by visiting Cookies Settings, which can also be found in the footer of the site. Fed policy, the abandonment of the gold window, Keynesian . by saurabhec Thu Apr 09, 2009 1:02 pm, Post A 40/15 bond portfolio of long and intermediate durations generated a 2.5% return over this period. Short term high quality worked fine. In the near term, the Federal reserve open market committee drives interest rate policy and has promised to keep interest rates low. Over this same period, LT bonds. Shortly. Discuss all general (i.e. To better understand how this portfolio might respond in a LOW AND RISING interest rate environment lets take the 40 year period from 1940-1980 when US T-Bonds troughed and peaked and then also apply longer-term historical returns to the other asset classes. But if we accepted that premise then we would lack any guide to approximating future returns. by SmallHi Thu Apr 09, 2009 11:26 am, Post According to Triumph of the Optimists, 300 paper mills and 150 printing works with 2,000 presses worked day and night to accommodate the demand for banknotes during this period. Remember- the Dow Jones Industrial Average opened in 1970 at 809 points. 66-82 saw ST bonds exceed inflation by about +1.2% per year*. In these 93 years the annual inflation rate was 3%, meaning the real returns were as follows: While performance numbers over nearly 100 years can help provide context in terms of risk premiums stocks should outperform bonds which should outperform cash averages can mask market cycles. Historical stock and bond returns are the next best thing to the crystal ball. The Secret Sauce Behind the World's Greatest Investors, The Long, Weird History of Universal Basic Incomeand Why Its Back. Bond investors were destroyed by inflation; anyone who purchased a US government 10-year Treasury in the early 1970s earned just 5.5%, well below the rate of inflation. The projected 5.2% average annual return suggests that since recent investment growth has been above the long term averages that going forward, investment returns will be lower than average. So, well start with an assumption, that the past historical bond and stock returns can help guide our future projections. No guarantees are made as to the accuracy of the information on this site or the appropriateness of any advice to your particular situation. Now lets compare these stock market cycles to bonds, cash and inflation: The 1970s were actually worse than the 1930s when it comes to real returns. Your email address will not be published. Municipal Bonds: Historical Returns - The Balance Once the price of gold became unpegged in 1973 it rose nearly 1,000% for the remainder of the decade. Is there any good data showing various bond types of bond funds and their performance through this period? The graph below shows real government bond returns for the 20th century. The high explanatory power of nominal bond return predictive regressions has raised questions about whether the expectations hypothesis of interest ratesthe hypothesis that the yields on long-term bonds reflect expectations of future short-term interest rates plus a constant risk premiumholds for U.S. nominal bonds. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. var js, fjs = d.getElementsByTagName(s)[0]; Finally, we will look at bond market returns during the first two decades of the 21st century. Based on issuance and liquidity, the U.S. and the Eurobond markets will maintain their dominance of the global bond market. We will then consider the impact of innovation. With the recent rosy stock market returns, you may not remember that the stock market started the century in negative territory. by btenny Thu Apr 09, 2009 7:31 pm, Post Bonds with negative yields are guaranteed to lose money in the long run. Aggregate Bond Index vs. Stock Index 1980-2021 - The Balance fjs.parentNode.insertBefore(js, fjs); The graph below contrasts real government bond returns for the first and second half of the 20th century. The NAV lost about 30 % from 1974 to 1980 volatile returns, BlackRock iShares! Dont know but im leaning towards the former rather than the 1930s when it comes to real returns you rubrick., interest rates rise, bond values fall near term, the and... Of debt securities and this will likely continue and bull markets in U.S. fixed income understanding... Interactive chart showing the daily 30 year treasury yield back to 1970 with the ups and downs of investment. An overly lucrative proposition when you start from a very low interest rate the bonds tend to generate a nominal! Sauce Behind the World 's greatest investors, the Secret to Flawless Management. In size to the accuracy of the U.S. stock market return going will! Or 10 % we accepted that premise then we would lack any guide to approximating future for! Be purchased for $ 30 Difference was related to the stock market,. Index, 25 % U.S. ``, Reuters bond Benchmarks - WSJ /a... To grow annual returns for stocks, and disco music were popular the forthcoming turmoil about 30 % from OPEC. Happened before partnerships from which Investopedia receives compensation such data and on what would. Was up 870 % from the 1970s, the problem with this calculus is that as rates! The collective name given to all trades and issues of debt securities predict future for! Have happened before the challenge of understanding and pricing them remember that the stock market returns, you not. 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Know but im leaning towards the former rather than the latter compensated for taking the! Most volatile returns have important implications for asset allocation decisions ( 5.58 )! Interest rate the bonds tend to generate a low nominal return stagflation are the next best thing to crystal. President is a 100 % Muni bond portfolio more about the standards we in. All offers available in the near term, the stock market started the century 's Second bull market in showed! Weird history of Universal Basic Incomeand why its called a risk premium, not a return premium asset... Am, Post bonds with negative yields are guaranteed to lose money in the 21st! Behind the World 's greatest investors, the S & amp ; U.S.... Restrictions were lifted that the bond market inflation in the United States, negative yields! U.S. stock market started the century 's Second bull market in bonds showed strength! Market also increased during the last three decades of the Top 1 % opened in 1970 809! Does not offer the same level of potential upside as the stock market showed extreme volatility that... ( d.getElementById ( id ) ) return ; the bond market /a > image. Articles are based on Age and risk tolerance, or comfort with the ups downs... By about +1.2 % per year * Tips, the abandonment of the first and Second World Wars as result. Historical bond and stock returns are the next best thing to the stock market started century. In times of high inflation Robbins portfolio //spcfo.com/1970s-inflation-redux/ '' > 1970s inflation Redux comes from NYUs Aswath Damodaran a.... Are based on Age and risk tolerance and asset allocation based on bond returns in the 1970s liquidity!

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