FYI: What will it take for large-cap stock mutual funds to overcome the drag of the 2000-02 bear market and their lagging ways in the 2002-07 recovery?
Because they fared so much worse than small- and midcap funds in those periods, large-caps have lagged far behind in the past 15 years.
How far behind? A $10,000 investment in the average large-cap fund on Dec. 31, 1999, would have grown to just $16,882 as of March 6 this year, according to Morningstar Inc. data. The same investment would have swollen to $37,912 in the average small-cap fund, $35,431 in the average midcap fund and $18,834 in the S&P 500.
Regards,
Ted
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Comments
That article reeks of performance-chasing to me. Yes, smallcaps outperformed, but they're also more volatile and not many people would willingly ride their dramatic ups and downs.
If you want a SWAN (sleep well at night) portfolio I don't think you'll find it by holding the majority of it in smallcaps. For me, smallcaps represent about maybe 15% of my holdings and I'm fine with that. I'm not out to hit home runs every year when it comes to much of my long-term retirement investments ... regular base hits and occasional doubles are enough.