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Author: Goofyhoofy Big funky green star, 20000 posts Top Favorite Fools Top Recommended Fools Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 74759  
Subject: Re: Is my wife smarter than me? Date: 8/27/2006 12:20 PM
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A chart that may be similar to what you are speaking of is "The Callan Periodic Table of Investment Returns (1986 - 2005)":
http://www.callan.com/resource/periodic_table/pertbl.pdf


Yes, it's similar, and a terrific illustration of what I was talking about.

One "class" in it, for instance, is "foreign", which after two stellar years (#1 best return) in 1986 and 1987, moves to last place (8th place) for the next 4 years, including several negative years.

More to the point of the original poster, the Russel 2000 (small cap) has done very well over the past 5 years - but if you look at the precending 20 years, not so much. Indeed, it placed last for a couple of years, had mediocre performance (compared to other asset classes) for many of those years, and came in first or second only 3 times in the first 15 years of the chart.

So basing an investment strategy going forward of realizing the kinds of gains in "small caps" that we have seen recently is unrealistic, to put it mildly.

I would love it if the chart showed even more classes: REITs, for instance - and even utilities, hard assets, and so on, but that would complicate it even further.

Interesting that the Lehman Bond Index seems to show the worst results of all, ongoing, and with only a few intermittent periods of outperformance - during the period of (internet) stock deflation around 2000 particularly. I wonder if that's a harbinger of what is coming with the real-estate bubble popping?

Anyway, thanks for the link. That's a great chart!
 
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