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Small- and Mid- vs. Large-Cap Stocks

Samuel A. Kiburz Jun 14, 2022
Chart illustrates the monthly total returns of mid-cap, small-cap, S&P composite 1500, and S&P 500 stocks spanning from December 1994 – December 2020.

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As of today, small- and mid-cap stocks on a year-to-date basis are performing better than their large-cap counterparts by 3% and 2%, respectively.

There is an ebb and flow but going all the way back to 1994 small- and mid-cap stocks have outperformed large-cap stocks by an annual 0.66% and 1.49%, respectively. Financial theory supports, and so far this year it is also true, that when you add them to your portfolio they lower your risk due to the additional diversification.

Since this follows our motto of obtaining the “highest returns, for the least amount of risk,” we include small- and mid-cap stocks in all our portfolios.

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