Bill Ford, CEO of US private equity giant General Atlantic, recently summarised the dual reality with which investors are currently grappling.

On one hand he talked about the optimism surrounding the potential of artificial intelligence, which he described as one of the most significant technological shifts in modern history, comparable to the arrival of railways, electricity and the internet.

At the same time, however, he pointed out that the world is facing a period in which geopolitical uncertainty and global complexity are unusually high.

Fortunately, as multi-asset investors, we’re not in the business of predicting what will happen next and putting all our eggs in a single basket based on that. Instead, we seek to ensure that investors are prepared for a range of scenarios, with broadly diversified portfolios designed to navigate shifting market conditions.

Our chart this week highlights the success rate of a multi-asset approach in delivering positive returns through a broad range of market conditions over nearly a century between 1928 and 2024.

It focuses on the performance of a portfolio comprised of 60% US stocks (the S&P 500 index) and 40% US government bonds (five-year Treasuries*). The chart looks at a range of different rolling timeframes between one month and 20 years. It shows in percentage terms how frequently the portfolio would have delivered a positive return if held for that timeframe from any given starting point during the 96 years.

This period included the Great Depression, the 1973 Oil Crisis and the 2008 global financial crisis. Despite the impact of these and other episodes of market volatility, the 60/40 portfolio produced a positive return in 90% of all rolling three-year periods and 95% of all rolling five-year periods. Expand the timeframe to 10-years and the portfolio always delivered a positive return.

Key takeaway

What our chart shows is that investing and successfully growing your wealth are about patience, rather than trying to forecast what might happen in unpredictable markets.

History has demonstrated that if you invest in a diversified multi-asset portfolio and give it time, the markets can do the heavy lifting for you.

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*US five-year Treasuries are bonds (interest-paying financial products issued by the US government when it wants to borrow money from investors). The amount borrowed is due to be paid back after five years.

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This article is provided for general information purposes only and should not be construed as personal financial advice to invest in any fund or product. These are the investment manager’s views at the time of writing and should not be construed as investment advice. The opinions expressed are correct at time of writing and may be subject to change. Capital is at risk. The value and income from investments can go down as well as up and are not guaranteed. An investor may get back significantly less than they invest. Past performance is not a reliable indicator of current or future performance and should not be the sole factor considered when selecting funds.