Bitcoin (BTC) has been the best-performing asset class, with a cumulative return of 14,893,099% since 2011. However, it has also been the most volatile, with significant highs and lows.
US Nasdaq 100 (QQQ) has also performed well, with a cumulative return of 748.5%. It has been less volatile than Bitcoin, but still more volatile than some of the other asset classes.
US Large Caps (SPY) has had a more moderate return of 382.3%. It has been less volatile than both Bitcoin and QQQ. US Small Caps (IWM) has had a similar return to SPY, at 207.9%.
It has been slightly more volatile than SPY. Gold (GLD) has had a more muted return of 37.8%. It has been less volatile than most of the other asset classes.
The financial landscape since 2011 has been dynamic and diverse, offering a wide array of investment opportunities. The chart detailing the total returns of various asset classes from 2011 to the present provides a fascinating insight into their performance. Here, we delve into a detailed analysis of these asset classes, emphasizing not just their returns but also their volatility and other key factors that investors should consider.
1. Bitcoin (BTC) – The High-Flyer with High Volatility
- Cumulative Return: A staggering 14,893,099% since 2011. Bitcoin’s meteoric rise is unmatched in the investment world, making it the top-performing asset class in this period.
- Volatility: Despite its high returns, Bitcoin is synonymous with volatility. Its price has experienced dramatic fluctuations, making it a high-risk investment. The asset’s performance is influenced by various factors, including regulatory news, technological advancements, and market sentiment.
2. US Nasdaq 100 (QQQ) – Strong Performer with Moderate Volatility
- Cumulative Return: The Nasdaq 100 has shown impressive growth with a return of 748.5%. This reflects the strong performance of technology and growth stocks.
- Volatility: While less volatile than Bitcoin, QQQ has experienced more fluctuations than traditional large-cap indices. Its concentration in high-growth technology stocks contributes to this volatility.
3. US Large Caps (SPY) – Steady Growth with Lower Volatility
- Cumulative Return: The SPY, representing large-cap U.S. stocks, has delivered a solid return of 382.3%. This is indicative of the steady growth of well-established companies.
- Volatility: SPY is less volatile compared to Bitcoin and QQQ. Its diversification across various sectors provides a more stable investment.
4. US Small Caps (IWM) – Moderate Returns with Higher Volatility
- Cumulative Return: With a return of 207.9%, small-cap stocks have shown decent growth.
- Volatility: IWM tends to be more volatile than SPY. Small-cap stocks are often more sensitive to economic changes and can exhibit larger price swings.
5. Gold (GLD) – Muted Returns with Least Volatility
- Cumulative Return: Gold has had a cumulative return of 37.8%, the lowest among the discussed asset classes.
- Volatility: Traditionally a safe-haven asset, gold exhibits the least volatility. Its price movements are generally more stable, making it a preferred choice during economic uncertainties.