Investments: for the past 10 years my portfolio had returned 6.5% - annually

[chucky2525]

So I have been out of school for 25 years and I have a little trouble to come up with a solution to my personal dilemma. I can't figure this out on my, on so please help me. I just checked my investments, and my record shows that for the past 10 years my portfolio had returned 6.5% - annually. I would say that 50% of my portfolio consists of stocks and the other 50% consists of bonds, gold and cash. The performance for the second 50% (bonds, gold, cash ) is -5%. I would like to know how my portfolio would have performed if it was 100% stocks (given the same stocks I already own, just double the amount).

My return was 6.5% annually for the whole portfolio. And the second half of my portfolio was down 5% (over 10 years).

p.s.: I know that it is a fairly simple math problem , but somehow I am having a hard time coming up with the solution. Thx.

 

[JeffM]

So I have been out of school for 25 years and I have a little trouble to come up with a solution to my personal dilemma. I can't figure this out on my, on so please help me. I just checked my investments, and my record shows that for the past 10 years my portfolio had returned 6.5% - annually. I would say that 50% of my portfolio consists of stocks and the other 50% consists of bonds, gold and cash. The performance for the second 50% (bonds, gold, cash ) is -5%. I would like to know how my portfolio would have performed if it was 100% stocks (given the same stocks I already own, just double the amount).

My return was 6.5% annually for the whole portfolio. And the second half of my portfolio was down 5% (over 10 years).

p.s.: I know that it is a fairly simple math problem , but somehow I am having a hard time coming up with the solution. Thx.

\(\displaystyle 50x + 50y = 100(0.065) \text { and } y = -\ 0.05 \implies \\

50x + 50(-\ 0.05) = 50x - 2.5 = 6.5 \implies 50x = 9 \implies x = \dfrac{9}{50} = 18\%.\)

One thing you may not have taken into account is that the bonds and perhaps the "cash" may have been paying an income. Of course, equities pay dividends, but if they are reinvested automatically, you are comparing apples and oranges.

 

[Denis]

1 : p%
1 : -5%
---------
2 : 6.5%

[1*p + 1*(-5)] / 2 = 6.5
(p - 5) / 2 = 6.5
p - 5 = 13
p = 18 : as per Sir Jeffroi