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Just
the Facts, Part 2
Brian
Trumbore
President/Editor, StocksandNews.com
This week we'll examine the numbers
for investing in Growth vs. Value stocks, as well
as some facts about investing in the international
markets. All figures are gleaned from the 2003 Ibbotson
Associates Yearbook. Ibbotson, in conjunction with
the Center for Research in Security Prices at the
University of Chicago, has developed its own method
for determining asset class returns, with the numbers
going back to 1968.
For
the period 12/67-12/02, all value stocks (small, mid,
and large) have far outpaced growth stocks, 12.5%
on an annualized basis to 9.0%. Meaning that $1 grew
to $61.26 for a value investment over the same period,
versus just $20.32 for growth, not that the latter
is anything to sneeze at.
For
the period 1993-2002:
All
Growth?+8.0%
All Value?..+12.0%
Small
Cap Growth?.-2.8%
Small Cap Value?..+12.3%
And
I thought we'd take a look at the period 1992-2002,
which encompasses 3 years of slow growth following
a recession, a 5- year period of more robust growth,
and then the 3-year 'bursting of the bubble' era that
also included another recession.
Annual
% Returns / Large Cap Growth vs. Large Cap Value
| |
LCG |
LCV |
| 1992 |
+4 |
+16 |
| 1993 |
+3 |
+24 |
| 1994 |
+1 |
+1 |
| |
| 1995 |
+41 |
+52 |
| 1996 |
+25 |
+23 |
| 1997 |
+36 |
+50 |
| 1998 |
+81 |
+22 |
| 1999 |
+27 |
+31 |
| |
| 2000 |
-22 |
-15 |
| 2001 |
-20 |
-10 |
| 2002 |
-21 |
-21 |
Global Market Capitalization / Developed Economies,
12/02
| United
States |
52% |
| Japan |
11% |
| Other
Pacific |
4% |
| United
Kingdom |
9% |
| Other
Europe |
21% |
| Canada |
3%
|
Source:
Morgan Stanley Capital International Blue Book
For
the period 1970-2002:
| Europe |
10.7%
annualized return |
| United
States |
10.8% |
International
stocks significantly underperformed during the period
1995-97, due to poor returns from Asia, but European
stocks matched up fairly well against the U.S.
| |
SP
500 |
Int'l |
Europe |
| 1995 |
37.4 |
11.6 |
22.1 |
| 1996 |
23.1 |
6.4 |
21.6 |
| 1997 |
33.4 |
2.1 |
24.2 |
Since
'97, returns have been more similar, especially 2000-2002,
with every broad-based region down from 8 to 26%,
annually.
Seasonality
And
for those operating under the old saw, buy in November
and sell in May, looking at the S&P 500 index:
May
has been negative 4 of the last 5 years
June negative 2 of 5.
July negative 5 of 5.
August negative 3 of 5.
September negative 4 of 5.
But?October
is positive 4 of the last 5 years.
*Wall
Street History will return May 9.
Brian
Trumbore
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