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John Bogle's never bought the idea that small caps outperform large caps over time, but his...

John Bogle's never bought the idea that small caps outperform large caps over time, but his assertion is based on the removal from the 20th century a decade of particular small cap outperformance starting in 1973. Without it, he says, large caps have actually done better. Is this fair? What if we remove a decade of large cap dominance? In 2012, microcaps (IWC) have gained 15%, vs. 11.6% for the Russel 2000 (IWM), and 13.6% for the SPY.
Comments (2)
  • Brian Bobbitt
    , contributor
    Comments (1899) | Send Message
     
    I think you are walking a path in the haunted forest, trying to use those number filled records to conceptualize what you should invest in, and you need to boil down to a sector, which is hot, or likely to be, then find some issues in that sector. Let me save you the trouble. Barring any geodes from space, nukes from Iran, or poison gas from Syria, I think you need to look more realistically at what is afoot. The Coffee Shop knows, and at our last annual meeting today, we came up with the sector of the best performing sector in the last 20 + years, REITs coming in at an average of 10.23%, second, believe it or not, Small/Mid Cap at 9.80%, then Large Cap coming in at 9.8%. With those figures, I can't see much difference. These are the bottom lines offered in a meeting with a huge mutual fund company, attempting to get my 'folio.
    OVERALL, over the last 20+ years, a diversified 'folio is the safest. In fact a little above average safety, and NEVER took a place less than 6th (in a group of 10 sectors, one being international, and one being cash) and return average 8.18%. THAT would satisfy me. S&P 500 would average between 8 & 9% on a good year. So you are all kinda hitting the bulls eye, or close enough not to argue about whose plan is best. Quite frankly, looking at them as a sector, you are so close, one would have to buy all and take the average return of the diversified 'folio for safety.
    In this 'folio, I suggest strongly REITs.

     

    Me? Have to excuse myself and go to the Casino.
    Or shall I go to the track?

     

    After alla that, I say buy some, (in this order, Palladium, Silver, Gold, Numismatics, I added four nice coins today, {putting my money where my mouth is}).

     

    Capt. Brian
    The Lost Navigator
    6 Dec 2012, 04:36 PM Reply Like
  • 1234gel
    , contributor
    Comments (1402) | Send Message
     
    Market timing and sector selection is the foundation of good investing.

     

    Economies are constantly is a state of change and strength. Market trading is definitely a dynamic exercise in choices based upon current trends and changing patterns.

     

    I believe the best opportunities for 2013 are to be found in PM and emerging markets, and accordingly my focus will be in this environment. I will not however abandon my traditional favorites in energy and healthcare equities, but on balance I believe it is prudent to follow the growth trend in the primary movers in order to enhance the probability of success.
    6 Dec 2012, 09:36 PM Reply Like
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