NOTE: This post is part of an ongoing education series. This information is for educational purposes only. This information does not constitute investment advice. No rational person would make investment decisions based on a blog post. Please consult with your financial advisor before taking any action. If you wish to have specific advice for your situation please contact Polaris Financial Planning.
Every quarter I take a long look at how different segments of the investing world are doing. Below is the historical performance 6 US market segments. I divide the US market this way to try and decide where to invest money.
Data as of 9/30/11
|12-Month Return||3-Year Average||5-Year Average||10-Year Average|
|Large Growth Average||-0.06||2.75||0.45||3.22|
|Large Value Average||-1.85||-0.13||-2.48||3.43|
|Mid-Cap Growth Average||-0.95||3.65||1.54||5.69|
|Mid-Cap Value Average||-3.8||2.37||-0.82||6.51|
|Small Growth Average||-0.93||2.72||0.50||5.54|
|Small Value Average||-4.85||2.31||-0.72||7.52|
This is only one source of information I generally think of it as a contrarian indicator. That is to say, the better one of the segments has done and the longer it has exceeded the long term mean the less desirous it is. As can be seen above all six US segments are DOWN over the past 12 months (ending 9/30/11). However, since 10/3/11 the US market has climbed sharply. The S&P 500 had gone from 1,070 (10/3/11) to 1,238 (10/21/11). This is a welcome increase of almost 16% in just 3 weeks.
Over the 10 year time frame you can see some differences in the segments. Small and Mid Cap averages have done better and value has slightly out performed growth. Over 3 and 5 year time frames the performance of each segment is about the same. (within a few percent of each other). This would indicate that the variance occurred in the period from 5 to 10 years ago. So there is no current trend to indicate which segments are doing well and which ones are falling behind (As always, past performance is no guarantee of future results).
This would indicate that no changes are needed at this time for US Index Portfolios based on my US Market Matrix recommendation. If you would like more information or specific advice on your portfolio please contact Polaris Financial Planning.