The history of Permanent Portfolio annual returns

[Tyler]

So I've been playing with returns data again, and put together a new chart I figured would be nice for discussion purposes.  It's another way to visualize "are my returns normal?"

[img width=500]http://i64.tinypic.com/2uibua8.jpg[/img]

This is a histogram that sorts every inflation-adjusted annual return since 1972.  I think many people might be surprised to learn that the PP lost money as much as it did, but it's important to remember that 1) the returns are inflation-adjusted, and 2) the median loss is less than 1%.  So in nominal terms many of those losses really felt like gains. 

For comparison, here's the same chart for the stock market:

[img width=500]http://i65.tinypic.com/140meqd.jpg[/img]

The most interesting stat to me is how infrequently the stock market actually delivers its average return in any given year.  It's no wonder people get caught off guard and sell low -- when you only look at the average, the reality of the experience is very out of line with initial expectations. 

Discuss.

[Dieter]

Great -- thanks! What jumps out at me is that both are down about the same amount; 32% vs 30% (albeit the AMOUNTS are quite different.)

When free time is copious have to compare with three-fund style Boglehead 60/40 portfolio....