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Diversified Investment Allocation Tool
WHY DIVERSIFIERS
Generally, a diversifier are asset classes with attractive return potential and historically lower correlation when compared to core investments, such as investment grade fixed income and most equities of developed markets. In our opinion, an important objective of investing with diversifiers is to balance portfolios with many different sources of risk and return. Different allocations to diversifiers, funded via various combinations of stocks and bonds, can potentially help accomplish that goal.
POTENTIAL IMPACT OF DIVERSIFIERS
When allocating to diversifiers from equities, as represented by the S&P 500 TR index, the tool shows that the resulting portfolios historically generated higher returns and lower risk in the majority of the 3, 5, and 10 year periods of time it measures. Investors should consider that historically, during shorter periods of market stress, diversifiers tended to outperform equities. Conversely, during previous periods of strong equity returns, diversifiers have historically underperformed stocks.
When allocating to diversifiers from bonds, as represented by the Bloomberg Barclays Aggregate Bond TR index, the tool shows that the resulting portfolios historically have tended to generate higher returns and higher risk over the long periods of time it measures. Investors should consider that historically, during shorter periods of market stress, interest rates declined and bonds tended to outperform diversifiers. Conversely, during previous periods of rising rates, diversifiers tended to outperform bonds.
MANAGE ALLOCATION
| 1 | The sliders in the tool can be adjusted independently to reflect the stock and bond allocations of a theoretical portfolio without diversifiers, and one that includes diversifiers. |
| 2 | The allocation to diversifiers can be made from stocks, bonds, or a combination of both. |
RISK CONSIDERATIONS
This reflects index performance and does not represent the performance of any Goldman Sachs product and is not representative of any specific product.
Indices are unmanaged. The figures for the indices reflect the reinvestment of dividends but do not reflect the deduction of any fees or expenses which would reduce returns. Investors cannot invest directly in indices.
Past performance does not guarantee future results which may vary.
