A History of Trust: Crews Banking Corporation

This chart comes from the Visual Capitalist. Since 1950, the average economic expansion lasts 67 months. The average recession, though painful, only lasts 11 months.

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.

One of our clients calls this the “Chiclets Chart” because of its resemblance to that classic brand of candy-coated chewing gum.

Today’s chart from Morningstar shows annual net flows into passive funds (in purple) vs. active funds (in orange), and their dominance for the last 11 years.