Why Diversification is the Key – 20 Years of Asset Class Returns: Chart

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Diversification among asset classes is one of the simplest and easiest ways to reduce risk and increase stability to a portfolio. As no one asset class can top the returns every year it is important to diversify. The following chart shows the returns of various asset classes from 2002 to 2021. Large-cap US growth stocks were the winners with an annualized return of around 11%.

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Source: MFS

Related ETFs:

  1. SPDR S&P 500 ETF (SPY)
  2. Vanguard S&P 500 ETF (VOO)
  3. iShares TIPS Bond ETF (TIP)
  4. iShares iBoxx $ Investment Grade Corporate Bond ETF (LQD)
  5. iShares Core Total U.S. Bond Market ETF (HYG)
  6. SPDR® Barclays High Yield Bond ETF (JNK)

Disclosure: No positions

Minerals Used in Electric Cars vs. Conventional Cars

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Copper is one of the most important mineral in the world and Copper prices are traditionally considered as the barometer of the global economy. As the world transitions to everything green, the demand for copper would only increase. One estimate puts the global copper consumption will double by 2035 in order for the world to meet zero-emission energy goals. However the transition to clean energy would bring new headaches for the global economy especially in terms of the need for critical minerals. For instance, growing consumer demand for EVs leads to higher demand for minerals. According to the IEA, a typical electric car requires six times the mineral inputs of a conventional internal combustion engine car.

The following chart shows the minerals used in EVs compared to conventional cars:

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Source: The Role of Critical Minerals in Clean Energy Transitions, IEA