Market Time Machine: Historical Portfolio Simulator

What the Market Time Machine shows

This tool takes a portfolio you design and runs it through the actual returns of the last hundred years — the Great Depression, the war years, the 1970s inflation, the dot-com collapse, 2008, the pandemic. You are not looking at a projection. You are looking at what your allocation would have done to real money through the worst decades on record, next to the benchmarks it is usually compared against.

How it works

You set the percentage of your portfolio in five asset classes — stocks, bonds, real estate, gold and cash — and pick a start year. For every year from then to now, the tool takes that year's actual return for each asset class, weights them by your allocation, and applies the combined figure to your running balance. It does the same for five reference portfolios at once: a classic 60/40, Ray Dalio's All Weather, Harry Browne's Permanent Portfolio, and an aggressive and a conservative mix.

Because your target weights are re-applied to every single year, the model is doing something specific: it rebalances back to your target allocation annually. That is not a neutral detail. Rebalancing is what forces you to sell whatever just went up and buy whatever just fell, and over a century it is responsible for a meaningful share of the difference between a mixed portfolio and the sum of its parts. The events overlaid on the chart are there so a number has a story attached to it — a 43% fall is abstract until it is labeled 1931.

What it assumes

• Returns are nominal, not inflation-adjusted. A portfolio that grew 8% in 1979 lost purchasing power that year; the chart will not show that, and the 1970s are where this matters most.
• Rebalancing back to target happens every year, free and instantly. In a taxable account, rebalancing realizes gains and costs money.
• No fund fees, no trading costs, no taxes and no dividend withholding. A single percentage point of annual cost compounds to roughly a quarter of the final balance over forty years.
• The asset classes are broad indices. "Stocks" is a whole market, not the shares you actually own, and no index existed to buy for most of the period being modeled.

History is a sample of one. That a portfolio survived every crisis in this dataset is evidence about its character, not a guarantee about the next crisis, which will be shaped differently.

A worked example

Put 100% in stocks and start in 1929. The balance falls by roughly two thirds within three years and does not return to its starting value for well over a decade. Put the same money in the Permanent Portfolio — a quarter each in stocks, long bonds, gold and cash — and the same three years cost you a fraction of that.

Then run both to the present day. The all-stock portfolio ends far ahead. Both facts are true at once, and the useful question is not which number is bigger but whether you would have held the first one through 1932 — because an allocation you abandon at the bottom returns nothing at all. That is what the tool is really testing.

Common questions

Are the returns adjusted for inflation?

No — they are nominal total returns. Read the long-run results as bigger than they were in purchasing power, especially any window that includes the 1940s or the 1970s.

Does it rebalance?

Yes, once a year, back to the exact weights you set. If you want to know what buy-and-never-touch would have done instead, set a single asset class to 100% — that is the only allocation rebalancing cannot change.

Why does the start year change the answer so much?

Because the order of returns matters as much as their average. Starting a year before a crash and a year after it produces very different balances from identical average returns — which is the single strongest argument for not putting a lifetime of savings in on one day.