Financial Yearbook 2023 — Das Family Office
Das Family Office
Dear clients, friends and stakeholders of Das Family Office,
2022 was a historic year in that it has seen the biggest bond bear market of our lifetime. Maybe historians will use words like ‘Bond Bubble Burst’ or the ‘Big Bond Reset’ to describe a market, in which global bond market aggregates lost more than 15% of their value. The good news is that the massive overvaluation of global bond markets should now come to an end. The same goes for the experiment with negative interest rates, which lasted for almost a decade.
As global bond and equity valuations look more reasonable, now is actually a good time for investors to build sustainable portfolios comprised of quality bonds and stocks. Even the heavily criticized ‘60/40 Portfolio,’ which has long suffered from the fact that its fixed income component was much too expensive and prone to a brutal correction, should now benefit from both, sensible stock, and bond valuations.
I’m therefore very happy to present the fifth edition of the DFO Financial Yearbook, which presents long-term risk and return characteristics of a large group of relevant asset classes. Apart from individual asset class portraits, it also includes stress tests and timeless investment wisdom to provide a robust context for long term investors. Das Family Office is keen to shed light on the fact that long term returns essentially range from the inflation rate, which on average was about 2% p.a. in the last few decades, up to about 10% p.a. for global shares of small company stocks.
These are actually very attractive returns, but only if investors keep their nerves, when markets are tough, they will be able to compound their investments at such attractive rates. In the absence of a cool mind, investors will change, reshuffle, or sell their investments at the wrong time and go in circles with uninspiring outcomes. Disappointment breeds frustration and scepticism whether long term investing is even worthwhile.
Our Yearbook shows very clearly, that patient long term investors, who are focusing on sensible and globally diversified strategies, don’t lose money, beat inflation, and enjoy attractive equity risk premia!
Founder & CEO of Das Family Office