The following graphs shows which types of stocks outperformed others over recent historical periods. Generally growth stocks have outperformed value since 2007; this persisted in the 1st quarter of 2019. At WealthFactor we believe over time Value with outperform growth and smaller companies will outperform larger ones. The longer the opposite holds true the more constructive we are on Value and smaller companies.
The media tends to sensationalize the point change for an index. This isn’t useful to investors. This graph puts the S&P into a logarithmic scale. This allows for better perspective relative to time frame and magnitude.
The following is a rolling period analysis which may be useful in assessing what the proper time horizon is for an investment. While past results aren’t indicative for future returns this does provide a basis for the proper investment time horizon for the equity portion of a portfolio.
This graph shows the impact the Federal Reserve Bank has had on short-term interest rates since it started its tightening cycle. This graph illustrates the importance to understand the Fed’s limited impact on the intermediate and longer maturities as those rates in some cases have fallen over some prior periods.
The key to success is creating a customized and efficient investment plan that each investor can stick with and implement it in an unwavering disciplined way. The goal of sharing this information is to provide a framework for discussion to help investors look past the short-term volatility and noise that global financial markets inherently contain.
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