Review: Asset Returns by Decade
A deeper look into which assets dominate which decades
I’ve seen the following chart far too many times all over finance X, LinkedIn and Reddit.
It’s a great start, but it isn’t specific enough. The real estate line always bugged me, I know real estate has done better than that, and housing is a different asset class from REITs anyway. Corporate bonds aren’t the same thing as treasuries either. So I went ahead and built my own version, combining reliable data from several sources. Here goes:
This is more like it.
The key takeaways: Housing is no match for stocks, the all-time winner and, I’d bet, the winner in the future as well, though REITs have proven to be great investments in their own right, compounding at 10.8% a year since the 1970s. I’m less sure about the future of real estate in the AI-driven world we’re heading into though. Corporate bonds clearly beat treasuries, picking up roughly two extra points a year for the credit risk. And the US has lived through inflationary decades before, so it can happen again: the long-run average of 3.1% sits comfortably above the Fed’s 2% target.
The bigger lesson is the one printed under the title: no asset wins every decade. Stocks lost money in the 1930s and again in the 2000s. Gold compounded at 28.6% a year through the 1970s, then spent the next twenty years going backwards. Government bonds had a spectacular 1980s and are negative so far in the 2020s. Every column here has at least one bad decade.
That bottom row of averages is great info but its misleading on its own. Nobody gets to invest in the average. You invest in whichever decade you happen to be living through, and you don’t find out which one it was until it’s over. Stocks have compounded fastest across the full 1930-2025 stretch by a wide margin, but the road there ran straight through two lost decades.
The table is less a ranking of assets than a reminder of the need to understand the environment you are in, even if not precisely and diversify accordingly.
If you want to see this chart live and have it auto update check it out on: https://arsenal.finance/assetclass