Starting with $10,000, comparing 100% S&P 500 vs. 60/40 S&P 500 and Treasuries over 10 years
Chart 1: Steady Growth Comparison
The Perfect World Scenario: This chart shows theoretical steady growth at average returns - 9.5% annually for S&P 500 vs. 7.3% for the 60/40 portfolio. In this fantasy world, your investment grows smoothly every single year without any volatility. Your $10,000 becomes $24,520 with 100% stocks or $20,100 with the 60/40 mix. If only investing were this predictable!
Chart 2: Real Market Volatility (2014-2023)
Living Through Modern Volatility: This shows actual S&P 500 performance over the last decade. Notice the stomach-churning drops in 2018 (-6.2%) and especially 2022 (-19.4%). Imagine watching your retirement account drop nearly $2,000 in a single year! But also see the thrilling gains - up 28.9% in 2019 and 26.9% in 2021. The 60/40 portfolio smooths this emotional roller coaster, turning a 19.4% loss into just an 11.7% decline in 2022.
Final values: $25,567 (100% stocks) vs. $21,035 (60/40 portfolio)
Chart 3: Starting with a Major Crash (2008-2017)
The 2008 Financial Crisis Test: Imagine retiring in 2008 and immediately losing 38.5% of your nest egg - your $10,000 drops to $6,151 in just one year! That's the harsh reality of the financial crisis. Even the 60/40 portfolio drops to $7,850 (-21.5%). But notice the recovery: patient investors who didn't panic saw their accounts recover and grow. The lesson? Crashes are temporary, but selling in panic locks in permanent losses.
Final values: $17,817 (100% stocks) vs. $16,243 (60/40 portfolio)
Chart 4: The Great Depression Era (1929-1938)
The Worst-Case Historical Scenario: This is what true financial catastrophe looks like. Starting in 1929, investors watched helplessly as their wealth evaporated - down 11.9%, then 28.5%, then an devastating 47.1% in 1931 alone! By 1932, your $10,000 had shrunk to just $3,352. Even with some recovery years (up 46.6% in 1933!), the decade ended with massive losses. The 60/40 portfolio offered some protection but still lost money overall. This is why diversification across asset classes AND having emergency funds outside the market matters.
Final values: $5,425 (100% stocks) vs. $7,244 (60/40 portfolio) - Yes, you lost money even after 10 years!
Chart 5: The Stagflation Era (1973-1982)
When Everything Goes Wrong: The 1970s combined high inflation, oil crises, and economic stagnation. Your portfolio starts with two crushing years (-17.4% then -29.7%), briefly recovers, then gets hit again. Imagine the psychological toll: five years in, you're still down money. Add 1970s-style inflation eating away at your purchasing power, and this felt even worse than the numbers show. The 60/40 portfolio helped cushion the blows and actually ended slightly ahead.
Final values: $11,913 (100% stocks) vs. $13,383 (60/40 portfolio)
Chart 6: Dot-Com Bubble to Financial Crisis (2000-2009)
A Decade of Disasters: This period combined two major crashes - the dot-com bubble burst (2000-2002) and the financial crisis (2008). Investors endured three straight years of losses to start, a weak recovery, then got hammered again with a 38.5% loss in 2008. After an entire decade, you actually LOST money in stocks. This is why financial advisors stress that even 10 years might not be long enough for 100% stock allocation if you need the money soon. The 60/40 portfolio at least preserved most of your capital.
Final values: $7,588 (100% stocks) vs. $9,346 (60/40 portfolio) - The "lost decade" for stocks
In Summary
These charts reveal an uncomfortable reality: stock market returns aren't guaranteed, and when crisis hits, no one will bail you out. Your broker won't call to protect you. The government won't reimburse your losses. When markets crash 40%, that money simply vanishes from your account.
But treasuries offer something precious - a safety net that holds its value when everything else is collapsing. While your neighbor watches their 100% stock portfolio crater by 38%, your 40% treasury allocation keeps paying its steady 4%, cushioning the blow. Even just 20% in treasuries can transform a stomach-churning 38% loss into a more manageable 31% decline, while barely denting your long-term returns.
In the darkest moments of financial crisis, when stock investors are paralyzed with fear, that treasury allocation becomes your psychological lifeline - the stable foundation that helps you avoid the devastating mistake of panic selling at the bottom.