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Chart of the Day: First 10 Years vs. Next 10 Years

Crews Bank & Trust Wealth Management Services May 16, 2023
chart shows an analysis from January 19997 to February 2012

Contents

Today’s Chart of the Day is from a BlackRock research paper on concentrated portfolio risks. In it, they graph the top 25 performing stocks over the past 10 years, starting from 10 years ago, and their subsequent underperformance over the next 10. (Resulting in their total performance over the last 20 years.) The paper makes an impressive case to proceed with caution with examples from Yahoo, Sears, and GE. It also reminds us that 37% of all stocks actually lost money over the same 20-year period.

This reminds us of the famous quote from the father of modern finance, the great Nobel Prize laureate economist Harry Markowitz, who said on investing, “Diversification is the only free lunch in investing.”
Chart of the Day

About the Author

Crews Bank & Trust Wealth Management Services
Crews Bank & Trust Wealth Management Services

Experienced professionals from our wealth management services team can help you achieve a bright financial future through investment strategies tailored to you. We’ll show you all of the options available and help you choose the ones best suited to you. We’ll provide high-quality, personal service as we work toward your goals together. Our Portfolio Managers do not receive commissions on trades; our recommendations of investments are based solely on your best interests.

Investments are not a deposit or other obligation of, or guaranteed by, the bank, are not FDIC insured, not insured by any federal government agency, and are subject to investment risks, including possible loss of principal.

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