The Callan Periodic Table of Investment Returns is a beneficial tool used to illustrate fundamental investing principles.

There are various iterations, but all generally show investment returns for various asset classes, ranked from best (top) to worst (bottom). Each asset class is assigned a unique color-coding. Each column represents a calendar year.

The chart is intended to show the importance of diversification across asset classes (stocks versus bonds), investment styles (growth versus value), capitalizations (large versus small) and equity markets (U.S. versus international).

The rankings change every year, thereby demonstrating several key investing principles and concepts.

Diversification is a key investment principle many investors implement in their portfolios. Yet, diversification may make it more difficult to evaluate the performance of your investment portfolio – there are more asset classes and each will likely differ in allocation weightings.

The Periodic Table of Investment Returns is an extremely useful resource for investors. It is a simple visual tool to help set your expectations regarding your investment performance. By the mere definition of diversification, your investment performance will not be as strong as the top performing asset class and will not be as poor as the bottom performing asset class. Make it a habit to review The Periodic Table of Investment Returns chart to gain a better understanding of the investment market as a whole and to help maintain realistic expectations about investment performance.

1 FTSE 3-month T-bill Index is derived from secondary market Treasury bill rates published by the Federal Reserve Bank. 2 Barclays U.S. Aggregate Bond Index measures the U.S. bond market. 3 World Government Bond Index (WGBI) measures the performance of fixed-rate, local currency, investment grade sovereign bonds. 4 S&P 500 Growth Index measures the performance of the growth style large cap U.S. stocks. 5 S&P 500 Value Index measures the performance of the value style large cap U.S. stocks. 6 Bloomberg Commodity Index is composed of futures contracts on physical commodities. 7 MSCI EAFE Index measures the performance of the developed stock markets of Europe, Australia, and the Far East. 8 Russell 2000 Value Index measures the performance of the value style small cap U.S. stocks. 9 Russell 2000 Growth Index measures the performance of the growth style small cap U.S. stocks. 10 MSCI Emerging Markets Index measures the performance of equity markets in 23 emerging countries around the world.