2021 was a roller coaster of a year - we take a look back at some of the important news items
Asset Class Returns The dispersion of asset class returns was particularly wide in 2021. While the US stock market had a slow start and higher volatility, it was the strongest performer in sterling terms, while UK stocks also did well. Fixed income struggled due to rising yields, rising inflation and an outlook of rising interest rates. But thinking back to 2020, if it taught us anything it’s that in challenging market periods bonds bring well-needed defensive properties to portfolios.
This chart illustrates the performance of different asset classes for the last decade and an illustrative balanced portfolio, which has a combination of the different asset classes. It’s always tricky to pick the next best asset class. A portfolio that blends asset classes in line with your risk profile remains the best long-term approach to investing because it matches your tolerance to risk and smooths returns from the different asset classes.
