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    Diverification Chart

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    garthmeasey
    Over the past 20 years, no single investment category has consistently been the best performer from year to year. For example, gold was the worst performer in 1984 but the best in 1987. Small-cap growth stocks did very well in 1999 but poorly the following year. This demonstrates the importance of diversifying investments across different categories to protect from unpredictable market shifts. A balanced, diversified portfolio avoids relying too heavily on any single area that could underperform in a given year.

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    Diverification Chart

    Uploaded by

    garthmeasey
    19 views1 page
    Over the past 20 years, no single investment category has consistently been the best performer from year to year. For example, gold was the worst performer in 1984 but the best in 1987. Small-cap growth stocks did very well in 1999 but poorly the following year. This demonstrates the importance of diversifying investments across different categories to protect from unpredictable market shifts. A balanced, diversified portfolio avoids relying too heavily on any single area that could underperform in a given year.

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    Over the past 20 years, no single investment category has consistently been the best performer from year to year. For example, gold was the worst performer in 1984 but the best in 1987. Small-cap growth stocks did very well in 1999 but poorly the following year. This demonstrates the importance of diversifying investments across different categories to protect from unpredictable market shifts. A balanced, diversified portfolio avoids relying too heavily on any single area that could underperform in a given year.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    19 views1 page

    Diverification Chart

    Uploaded by

    garthmeasey
    Over the past 20 years, no single investment category has consistently been the best performer from year to year. For example, gold was the worst performer in 1984 but the best in 1987. Small-cap growth stocks did very well in 1999 but poorly the following year. This demonstrates the importance of diversifying investments across different categories to protect from unpredictable market shifts. A balanced, diversified portfolio avoids relying too heavily on any single area that could underperform in a given year.

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    Download as PDF, TXT or read online from Scribd
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    The Wisdom of Di ve r s i f i c a t i o n

    Take a moment to study this chart. As you can see, not one investment category has performed consistently over the 20-year period. For example, in 1984, the gold sector was the worst performer. By 1987, it was the best. Fast-forward to 1999, when, at the peak of the dot-com boom, small-cap growth stocks we re the best p e rformers. The next year they hit rock bottom. This is why you need a well-balanced, diversified port f o l i o. By allocating your assets among a variety of categories, you protect yourself from unpredictable shifts in the market. In other words, you avoid putting all your eggs in one basket.

    Ranking of Investment Categories from Best to Worst Over the Last 20 Years
    1984
    Bond Best Large Value

    1985
    Intl

    1986
    Intl

    1987
    Gold

    1988
    Small Value Intl

    1989
    Gold

    1990
    Bond

    1991

    1992

    1993
    Gold

    1994
    Intl

    1995

    1996

    1997

    1998

    1999

    2000

    2001
    Small Value Gold

    2002
    Gold

    2003
    Small Growth Small Value Gold Best

    Small Small Growth Value Mid Cap Large Value

    Large Large Large Large Small Small Value Growth Value Growth Growth Value Mid Cap Small Value Intl Mid Cap Large Growth Intl Mid Cap Large Value Bond Mid Cap Large Value Gold

    Gold

    Gold

    Intl

    Large Large Growth Growth

    Intl Small Value Large Value Bond Mid Cap Small Growth Large Growth

    Large Large Large Growth Growth Value Small Value Large Value Small Growth Mid Cap Bond Small Small Growth Value Mid Cap Bond Small Value Gold Mid Cap Small Growth Gold

    Bond Small Value Mid Cap Large Value Intl

    Intl

    Mid Cap

    Bond

    Large Large Growth Value Large Value


    Mid Cap

    Mid Cap Large Value

    Mid Cap

    Small Value

    Mid Cap Bond

    Bond Mid Cap Large Value Small Growth

    Small Large Large Value Growth Value


    Mid Cap Bond Mid Cap

    Mid Cap

    Large Large Value Growth

    Large Large Growth Value Bond Bond

    Intl Mid Cap Large Value

    Small Small Small Large Small Growth Growth Growth Value Growth Large Bond G r o w th Bond Small Value Intl Gold Small Value Intl Bond Large G r o w th Gold

    Large Large Large Bond Growth Value G r o w th Small Small Growth Value Gold Small Value Small Value

    Small Small Small Growth Growth Value Intl Small Value Gold Bond

    Intl

    Intl

    Intl

    Worst

    Large Large Large Large Growth Growth Growth Growth Small Growth Intl Small Bond Growth

    Worst

    Small Small Small Growth Growth Growth

    Gold

    Gold

    Intl

    Gold

    Intl

    Bond

    Gold

    Gold

    Source: Steele Systems, Inc., TSE Stock Exchange, and Bloomberg.

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