Interactive 50+ Year History of Asset Returns

Appendix

A. The instruments

Each line holds 100% of one instrument (Custom mixes them). Costs run from what an investor paid at the start to the cheapest way to hold it today (note 1); taxes are for a taxable account (note 2).

Every line has data from April 1968 except the treasury mix, from July 1976; a window that takes in an earlier month with it shown compares every line from July 1976.

B. Methodology notes

1. Costs: every result includes investing costs for a cost-conscious investor who always used the cheapest option of the day and switched as cheaper ones appeared, with no tax or cost-basis hit for switching. Commissions apply to every purchase and sale (including reinvested income and rebalancing); fund expenses come out of income first, so they also lower taxable income. The instruments table gives each one's costs then and now; hover one for its full schedule.

2. Taxes: "after tax" assumes a taxable account. Each year, income is taxed as it arrives at that year's marginal rate on the chosen income: the actual federal brackets for a married couple filing jointly, with the income adjusted for inflation to that year, plus a flat state rate. Gains are taxed only when rebalancing sells something, and on everything at the end. The table gives the average rate over each tax era at your settings; the yearly rates are in data/portfolios.json (tax.rates). Not modeled: the alternative minimum tax, phase-outs and deducting state tax.

   Years	Ordinary income housing rent	Treasury interest 10-yr treasury, t-bills (no state tax)	Dividends equities, high dividend	Long-term gains	Gold gains

3. Returns are nominal, not adjusted for inflation; compare them with the Inflation line. This matters most from 1973 to 1981, when inflation averaged about 9% a year: a bond paying 8% then lost buying power. No new contributions.
4. Dividends and interest are reinvested every month, paying that era's commission (see note 1). That is generous before the late 1970s, when an investor holding stocks directly would usually have let dividends pile up in cash and reinvested occasionally.
5. Treasury term: the UST line is a constant-maturity 10-year, not a blend of tenors. Each month it in effect holds one 10-year bond bought at that month's average yield and sold a month later at the next month's. The aggregate Treasury market is shorter: weighted by the amount outstanding at each tenor, the average maturity of marketable Treasury debt has mostly ranged around 4–6 years, so a market-weighted index would swing less than this line — smaller losses when rates rise (1968–81, 2022) and smaller gains when they fall (1982–2020). We chose a single tenor anyway, as the one long Treasury with a continuous monthly yield since 1968. The treasury mix line, from 1976, shows the blend.
6. Data is monthly, so drawdowns inside a month (like the single-day 1987 crash) are smoothed a little. Treasury returns are rebuilt from monthly average yields, a close approximation but not an actual fund.
7. Gold: the line starts in April 1968, after the London Gold Pool, which had held gold at $35 an ounce, collapsed and a free market split from the official price. Central banks kept dealing at the official price until 1973, and Americans couldn’t legally own bullion until the end of 1974, so before 1975 the line is what the free-market price did rather than what a US investor could have held.

C. Reading the chart

• Total return, income reinvested, rebased to 0% at the window’s first month. Labels give CAGR over the window. If a series starts inside the window, all lines rebase to its start.
• Log scale by default. Pre-cost and pre-tax unless Costs & taxes is on; Linear and both toggles are in Settings.
• Grey bands are NBER recessions. Marks below the plot are periods (□), events (●) and the outlook (○). Click one for its note.
• Pan by dragging or scrolling sideways. Set the window with the strip above the chart, or type a number of years. Click a label to isolate its line.