Your fund always invested in growth stocks. No dividends. A lotta tech in there. You got the “story” and didn’t mind paying 100x last year’s earnings for something growing earnings 400% for the foreseeable future.
But then growth stocks went through a period of disfavor. They went down more than dividend-paying stocks, where those divvys cushioned the downside. So now you’re suffering self-doubt. You’re 2 1/2 years into a bear market and you’re beside yourself, wishing you’d bought AT&T at the beginning of this down 30% bear market, and been flat over that period. But you didn’t. You’re a growth investor. That’s all you know. So your style drifted. You started nibbling on dividend stocks, slow growers, utility companies. And you did so juuuuust as the big bad bear market was ending and everything was going up again. So then those utility stocks 4 years later were up 32%, while your growth stocks, had you stuck to them, would have been up 200%.
Big whoops. Hey, pull over. This is where I get out of your Prius. I’ll rate you 5 stars. Thanks for the Lyft.
Related or Semi-related Video
Finance: What is a Diversified Mutual Fu...20 Views
finance a la shmoop what is a diversified mutual fund? all right people
listen up it's lots of investments stocks bonds exposure to risk and reward [Risk and reward punch man in face]
everywhere energy, telecom, insurance, real estate, banking, chemicals, tech, retail not
enough diversity yet well those are just sectors or industries and there's a
whole bunch of them what about geography geographic diversity the US, Russia, China
Europe someday maybe Mars Elon what do you think well maybe exposures to [Elon Musk floating in space]
different currencies or commodities cycles as the diversity you seek hmm
well that's diversity Benetton eat your heart out so the bigger question is why
would you want such diversity? well the idea is that you mitigate risk by being
diverse the don't put all your eggs in one basket thing if one investment goes [Value of investment graph appears]
bust well at least you have plans B C and D to fall back on and if this is
grabbing you check out our videos on efficient markets theory for more on the
subject or maybe diversify your knowledge and watch all of our finance
videos food for thought and you know please click on the ads that we got to [Man holding begging sign]
eat around here
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