One of our clients calls this the “Chiclets Chart” because of its resemblance to that classic brand of candy-coated chewing gum.
Each column in the box represents a specific year, and the color of each box is a “style” of various equity indexes. Returns for each year are ranked from highest to lowest.
Lots going on in this chart, but it’s important to notice how random the returns are: Some equities do well for one year and then the next year do not. Others do well for several years, then the next year do not.
The chart reminds us that holding all of these investments in various allocations reduces both price swings and risk.
As Portfolio Managers, from time to time we use this information to identify opportunities in portfolio construction. For instance, if you wanted to “buy low” you could buy Growth Funds, which are down 29% year to date, and to fund this, you could “sell high” your Value Funds which are only down 6%.
Samuel serves as Senior Vice President, Chief Investment Officer for the Crews family of banks. He manages the individual investment holdings of his clients, including individuals, families, foundations, and institutions throughout the State of Florida. Samuel has been involved in banking since 1996 and has more than 20 years experience working in wealth management.
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.