Within stocks, there are several categories to evaluate, such as growth versus value, domestic versus international, and large to small market cap.
Overall, the U.S. stock market has generated the highest returns among the major stock markets over the past 10 years as detailed below. It is the most prosperous, innovative, and politically stable country in the world which has propelled the U.S. stocks markets ahead of all major stock markets for years. Furthermore, the U.S. stock market already has global exposure, given approximately 40% of the S&P is foreign sourced income.
While company size is an important consideration for many investors, the investment style has a greater impact on returns. Traditionally, investment styles are defined as growth, value, and blended (growth + value). Growth stocks are those companies that have the potential to outperform the overall market over time because of their future potential. Value stocks are typically defined as companies whose stock price is currently trading below the company's underlying value. The expectation is that buying undervalued companies will generate a superior return over time. Whether growth or value stock investing strategy is better is a perennial debate. According to the following historical data, there is a clear winner.
Golden Eagle Strategies has constructed investment style indices that date back to 1958*. As seen in the table below, a $100,000 investment in aggressive growth funds would have grown to approximately $80 million before taxes. The same $100 investment in the S&P 500 would have grown to approximately $46 million. Of all investment styles, the aggressive growth style has proven to be the most rewarding over the long term.*
In other words, the Capital Asset Pricing Model (CAPM) does work. It holds that there is a reward for risk – especially when measured over time. This advantage still holds when looking at recent history. Aggressive growth bested all investment styles in the last 5 years with an annualized return of 30.9% vs 18.5% for the S&P. This story is the same when looking at 10 and 15 years – aggressive growth delivered annualized returns of 22.6% and 16.4%, respectively, versus just 16.6% and 10.7% for the S&P. *
* Investment Style Index (1958-20210) consists of Weisenberger Mutual Fund Report, Frank Russell Company, and Golden Eagle Strategies research.
Within stocks, there are several categories to evaluate, such as growth versus value, domestic versus international, and large to small market cap.
Overall, the U.S. stock market has generated the highest returns among the major stock markets over the past 10 years as detailed below. It is the most prosperous, innovative, and politically stable country in the world which has propelled the U.S. stocks markets ahead of all major stock markets for years. Furthermore, the U.S. stock market already has global exposure, given approximately 40% of the S&P is foreign sourced income.
While company size is an important consideration for many investors, the investment style has a greater impact on returns. Traditionally, investment styles are defined as growth, value, and blended (growth + value). Growth stocks are those companies that have the potential to outperform the overall market over time because of their future potential. Value stocks are typically defined as companies whose stock price is currently trading below the company's underlying value. The expectation is that buying undervalued companies will generate a superior return over time. Whether growth or value stock investing strategy is better is a perennial debate. According to the following historical data, there is a clear winner.
Golden Eagle Strategies has constructed investment style indices that date back to 1958*. As seen in the table below, a $100,000 investment in aggressive growth funds would have grown to approximately $80 million before taxes. The same $100 investment in the S&P 500 would have grown to approximately $46 million. Of all investment styles, the aggressive growth style has proven to be the most rewarding over the long term.*
In other words, the Capital Asset Pricing Model (CAPM) does work. It holds that there is a reward for risk – especially when measured over time. This advantage still holds when looking at recent history. Aggressive growth bested all investment styles in the last 5 years with an annualized return of 30.9% vs 18.5% for the S&P. This story is the same when looking at 10 and 15 years – aggressive growth delivered annualized returns of 22.6% and 16.4%, respectively, versus just 16.6% and 10.7% for the S&P. *
* Investment Style Index (1958-20210) consists of Weisenberger Mutual Fund Report, Frank Russell Company, and Golden Eagle Strategies research.
Manager of the Golden Eagle Growth Strategy
