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The Performance of Simplicity

In: The Evidence-Based Investor

Author

Listed:
  • Pascal Böni

    (Tilburg School of Economics and Management & TIAS)

  • Tim Kröncke

    (FHNW University of Applied Sciences and Arts Northwestern Switzerland)

Abstract

We take a look at the performance of a scientifically reasonable but very simple 50/50 buy-and-hold investment strategy that stays clear of investing myths. To this end, the historical long-term performance of a portfolio that invests 50% in global equities and 50% in government bonds is reviewed. Even though this 50/50-portfolio does not include any complex trading and investment strategy, it lead to an impressive performance: CHF 10,000 invested in 1970 would have grown to a staggering value of CHF 170,600 by the end of 2023. While there is no guarantee that such a performance will be repeated over the next 50 years, we argue that investment myths are likely to be a significant drag on long-term performance that can be avoided.

Suggested Citation

  • Pascal Böni & Tim Kröncke, 2025. "The Performance of Simplicity," Springer Books, in: The Evidence-Based Investor, chapter 0, pages 9-12, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-88675-1_2
    DOI: 10.1007/978-3-031-88675-1_2
    as

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