Success in investing can many times come down to avoiding the major losers rather than always hitting home runs with one’s winners. Correct sector allocation plays an important role in sidestepping potential landmines that out there in the market.
We have had a small pickup in volatility in the equity markets since October.
The median year-to-date performance in the MSCI World Index with two weeks of trading left is -1%. The median stock was up 20% at this point last year and was up 13% at this point in 2012. The developed country with the worst median performance YTD is MSCI Portugal. The median stock is down 35%.
The MSCI World Index is only about 6% of it’s 200-day high as of the close yesterday. However, 55% of the stocks in the index are down at least 10% and 30% of the stocks in the index are currently in a bear market (down at least 20%).