New Data for a New Year

New Data for a New Year


The January release of CPI inflation data is usually only marginally newsworthy and certainly not something to celebrate, but on a website dedicated to portfolio theory it’s a really big event.  It marks the day that the portfolios and calculators can all be updated with 2015 data!

As you browse the site for the updated numbers, you may also notice one more change.  If you’re wondering why the Pixel chart changed from red/green to red/blue, then hopefully you like the snazzy new color scheme.  But if you’re one of the 5% of people who suddenly think “AHA!  Now I get it.” then you should particularly appreciate the new colorblind-friendly layout.  Generating all new charts seemed like a great time to make the change, and I’d like to especially thank the people who were patient and provided feedback.

2015 was a tough year for portfolios of all types, and from the looks of the data I imagine there are a lot of frustrated investors out there.  Interestingly, I was surprised to see that every lazy portfolio on the site posted an inflation-adjusted loss for the year.  But don’t be discouraged, and never lose sight of the big picture.  Here’s just one example:

Swensen Portfolio Pixel Chart

See that little red dot at the bottom of the chart?  It may seem like a big deal to you right now if you’re watching your account balances like a hawk, but compared to the steady rolling ocean of positive historical returns there’s no reason at all to be losing sleep right now.  Watch the calm sea of blue, be patient, and stick with the plan.

Now perhaps you don’t yet have a plan that you’re comfortable with in both good times and bad — there’s no better time than the present to find one that will work for you!  And maybe you do have a plan you like based on its average return but have no idea what its down years historically really felt like — there are tools here for that, too.  Asset allocation is about so much more than maximizing your average returns, and it pays to understand the ride before you get to the first big drop.

To all investors new and old, I hope you enjoy the 2015 updates and find the information helpful.  May your 2016 be the best year yet!